NZ dollar climbs on strong US jobs numbers, stocks

The New Zealand dollar continued to climb against the greenback. Photo / Getty Images

The New Zealand dollar continued to climb against the greenback after surprisingly strong United States jobs numbers and as US equities rallied.

The domestic currency also strengthened against the Australian dollar as this country continues to demonstrate control over the coronavirus; with the Australian state of Victoria recording new cases of community transmission.

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The kiwi was trading at 65.12 US cents at 5pm in Wellington from 64.93 cents at the same time yesterday and 64.05 cents in New York last Friday. The trade-weighted index was at 72.09 from 71.85.

It rose to 94.01 Australian cents from 93.82 cents yesterday and has risen from just above 92 cents in early June.

The US non-farm payrolls data showed that economy added 4.8 million new jobs in June, smashing economists' expectation for a 3 million gain.

The kiwi's rise against the US dollar "was all about good payrolls, good equities," said Westpac currency strategist Imre Speizer. "It was as simple as that."

"The more interesting story is that last night, despite the positive mood, the kiwi out-performed the Aussie," Speizer said.

Strong Australian retail sales numbers released today, a 16.9 per cent jump in seasonally adjusted sales in May as lockdown restrictions there eased, didn't boost the Australian dollar either.

Viral numbers

"It's only circumstantial, but I suspect it's the rising coronavirus count in Australia" whereas NZ has the virus under control, Speizer said.

Victoria recorded a further 66 new cases of infection today and there are reports that up to 10,000 residents in the affected suburbs of Melbourne, who have returned to lockdown, have refused testing.

By contrast, NZ reported no new infections today and all the recent cases have been of travellers returning from abroad.

But the situation in the US is looking worse by the day: there were 57,236 new cases of infection on Thursday, up from 51,097 on Wednesday. Daily new case numbers have exceeded 40,000 since June 25.

Nevertheless, the outlook for the kiwi should remain positive "as long as the share market keeps going up," Speizer said. "I'm looking for it to go up to 66 cents in the next few days."

The US market is closed on Friday for the Independence Day holiday but the S&P 500 Index rose 0.5 per cent overnight. The S&P/NZX 50 also rose 0.5 per cent today.

The kiwi dollar was trading at 52.28 British pence from 51.98 pence, at 57.99 euro cents from 57.64 cents, at 70.01 yen from 69.77 yen and at 4.6014 Chinese yuan from 4.5892 yuan.

The bid price on the two-year swap was at 0.2000 per cent from 0.2025 per cent, while the 10-year swap was at 0.7430 per cent from 0.7575 per cent yesterday.