The New Zealand dollar stumbled to its lowest point this year after weaker than expected jobs data today.
It started the day at US67.89c but fell to a low of US67.35c, before a short squeeze and some Asian buying took it to a US67.53c close. That compares to US67.86c yesterday.
Statistics New Zealand said the jobless rate was 3.6 per cent in the December quarter against 3.7 per cent in the September quarter, heavily revised up from 3.4 per cent.
Economists focused on employment growth turning negative for the first time in over three years and said there were clear signs of easing pressures in capacity, inflation and the labour market.
The kiwi fell quite sharply immediately after the data and it weakened on all fronts -- the trade-weighted index dropping to 69.61 from 69.92.
Against the Australian dollar, the kiwi ended at A91.31c versus yesterday's A91.75c close. The Australian dollar also weakened against the US unit, closing on US73.87c from US73.96c yesterday.
An Auckland dealer said if the market had not been short overall, the kiwi dollar, the fall could have sharper.
"The data was weak, but not weak enough for the RBNZ not to change its tack."
But the June bill futures were now pricing in a 50 per cent chance of an easing of monetary conditions.
"The markets are trying to pre-empt things but you'd only need a few more exporters to go out of business and it will continue to the overall negative sentiment and snowball."
The jobs news came on top after the monthly ANZ World Commodity Price Index fell 0.3 per cent in January -- its eighth consecutive monthly fall -- but exporter returns improved 1.2 per cent as a result of the weakening of the New Zealand dollar.
Rates:
5pm today 5pm Wednesday
NZ dlr US67.53c US67.86c
NZ dlr/Aust dlr A91.31c A91.75c
NZ dlr/euro 0.5637 0.5666
NZ dlr/yen 80.01 80.14
NZ dlr/stg 38.72p 38.89p
NZ TWI 69.61 69.92
Australian dollar US73.87c US73.96c
Euro/US dollar US1.1966 US1.1977
US dollar/yen 118.60 118.06
- NZPA
<EM>Currency:</EM> Kiwi falls to lowest this year
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