Currency: Dollar weaker on poor US job stats

The New Zealand dollar weakened to a10-day low today after the US dollar rose overnight on bleak US jobs data.

By 5pm the NZ dollar was buying US62.98c, having dipped to US62.59c, its lowest since June 23, from US63.79c at 5pm yesterday.

The US dollar rose against major currencies after bleak US jobs data renewed concerns about the economy and enhanced the greenback's safe-haven appeal.

US Treasury bonds rose in price and stocks fell sharply after a government report showed US employers cut 467,000 jobs in June, far more than expected, while the national unemployment rate rose to 9.5 per cent.

The data raised investor risk aversion, which also pushed the yen higher and drove down higher-yielding, commodity-linked currencies such as the New Zealand dollar.

While analysts continue to cite big maturities of foreign issued bonds denominated in New Zealand dollars as a downward pressure, a Reuters poll said the attraction of high yield was still likely to benefit the New Zealand dollar in coming months.

"The attractiveness of carry trades due to lower volatility, a softer yen and spreading risk appetite is supportive of the New Zealand dollar in the medium term," said Roberto Mialich of UniCredit MIB.

With the US heading into its July 4 long weekend, liquidity in currency markets would be light until the US market opened again next week.

At the local close today the NZ dollar was down to 60.45 yen from 61.60 at 5pm yesterday, and down to 0.4505 euro from 0.4517.

Against the Australian dollar, the NZ dollar dropped to a 2-1/2-week low around A78.70c overnight before improving to A79.07c by 5pm from A79.30c yesterday. The trade weighted index fell to 59.66 from 60.16 yesterday.

Currency rates:

5pm today 5pm yesterday

NZ dlr/US dlr US62.98c US63.79c

NZ dlr/Aust dlr A79.07c A79.30c

NZ dlr/euro 0.4505 0.4517

NZ dlr/yen 60.45 61.60

NZ dlr/stg 38.46p 38.75p

NZ TWI 59.66 60.16

Aust dlr/US dlr 79.62c 80.37c

Euro/US dlr 1.3989 1.4113

US dlr/yen 95.97 96.60

- NZPA