The New Zealand dollar remained under pressure after yesterday's weaker than expected employment data added to the view that the Reserve Bank has plenty of scope to keep interest rates on hold for a protracted period.
The kiwi traded near a week-low at 74.33 US cents as at 8am in Wellington from 74.28 cents yesterday. The trade-weighted index was at 78.10 from 78.16 yesterday.
Government figures yesterday showed employment shrank 0.2 per cent in the June quarter, surprising economists who had been anticipating a seventh straight quarter of expansion. While other details, including the headline unemployment rate at 4.8 per cent, continued to show a robust labour market, the weaker employment reading prompted ASB Bank to push out its predicted timing for a rate hike until early 2019, bringing it in line with the central bank's own forecasts.
"The labour market reports weren't actually that bad, with other measures of employment and hours-worked showing solid gains, the unemployment rate falling to 4.8 per cent, its lowest level since 2008, and wage growth showing hints of bottoming out in nominal terms," Bank of New Zealand currency strategist Jason Wong said in a note. "But with record long speculative positioning, the NZD is priced for perfection and there was nothing in the report to suggest that the RBNZ would move anytime soon from its neutral policy stance."
Local data releases today include Auckland real estate figures from the city's biggest realtor and the ANZ commodity price index, following yesterday's dip in dairy prices at the GlobalDairyTrade auction.
