The New Zealand dollar rose above 96 Australian cents for the first time in five weeks, after data showed a weaker-than-expected Australian labour market, stoking talk the two currencies could reach parity.
The kiwi rose as high as 96.01 Australian cents, and traded at 95.85 cents at 5pm in Wellington, from 95.50 cents late yesterday. It reached a post-float high of 96.52 cents on Jan. 8. The local currency dropped to 73.42 US cents from 74.21 cents yesterday.
The Australian economy unexpectedly shed 12,000 jobs last month, while the unemployment rate climbed to 6.4 per cent, the highest since 2002, adding to speculation the Reserve Bank will cut interest rates again from a record low to underpin growth. That contrasts with New Zealand, where the central bank has reminded the market monetary policy is in neutral not easing mode in the face of robust domestic growth.
"New Zealand's above-trend growth, relative to Australia's below-trend growth, is a key driver," Stephen Toplis, head of research at Bank of New Zealand, said in a note. "We remain skeptical that parity will be achieved in this economic cycle."
BNZ expects the kiwi to "oscillate around 95" Australian cents "well into 2016." The bank expects the kiwi dollar to extend its slide against the US dollar in the face of "tightening monetary conditions in the US accompanied by a slowing growth profile in New Zealand."
