The New Zealand dollar rose against all currencies today after much stronger than expected employment numbers that portended further interest rates.
The kiwi's move was exaggerated against the Australian dollar, where it gained almost a cent, following contrasting much weaker than expected employment numbers there.
The kiwi closed on US68.80c compared with US68.19c yesterday while the Australian dollar fell to US73.32c from 73.38c. The kiwi cross rate climbed to A93.75c from A92.92c.
ANZ Investment Bank senior dealer Mark Elliott said it seemed almost certain the cross rate would climb above A94c in overnight trading. If that happened, momentum traders were likely to climb aboad and push it higher.
"It's scary stuff," he said. "It's a very key level. If it pushes beyond 94c, that's a massive top, you are probably going to get all sorts of stop-loss and momentum action if it gets through there. From a technical point of view it will be really serious. It will create an exaggerated move."
While New Zealand's jobless rate fell to a 23-year low of 3.4 percent from 3.6 percent and quarterly job growth was much higher than expected at 1.3 percent in the quarter, Australia's unemployment rate rose to 5.2 percent from 5 percent and that economy shed 19,800 jobs in October, including a massive 60,800 drop in full-time employment.
Concerns that rates in Australia will be hiked have dissipated while in New Zealand economists are now worried the Reserve Bank will hike the cash rate by half a percentage point on December 8 rather than a quarter.
Mr Elliott said it was unusual for the New Zealand and Australian dollars to go in different direction.
"It's not just one leg going faster than the other in the same direction, it's each leg moving independently of each other."
New Zealand 90 day bank bill futures were sold off 8-10 points in response to the jobless data.
The move comes as the Reserve Bank and Treasury announced they will investigate possible additional tools to higher interest rates that they could use to help the bank rein in inflation without pushing the currency to levels hurtful to exporters.
The US dollar shuttled in narrow ranges near two-year highs against the euro and the yen as dealers awaited trade figures to provide short-term direction for the US currency.
The following are Reuters currency rates:
NZ dlr US68.80c US68.19c
NZ dlr/Aust dlr A93.75c A92.92c
NZ dlr/euro 0.5848 0.5794
NZ dlr/yen 81.00 79.97
NZ dlr/stg 39.50p 38.12p
NZ TWI 71.29 70.59
Australian dollar US73.32c US73.38c
Euro/US dollar US1.1760 US1.1778
US dollar/yen 117.74 117.28
- NZPA
<EM>Currency:</EM> NZ dollar sprints higher
AdvertisementAdvertise with NZME.