New Zealand dollar trades above US$0.59
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Daily Currency Update
The New Zealand dollar is slightly stronger this morning when valued against the Greenback currently trading at 0.5986 at time of writing. The New Zealand dollar continues to be underpinned by Wednesday's better-than-expected employment details, which lowered the likelihood of a rate cut by the Reserve Bank of New Zealand (RBNZ). Last week Statistics New Zealand said the nation's jobless rate rose to 4.6% in the second quarter, from an upwardly revised 4.4% in the previous three months, while employment increased 0.4% versus the prior quarter. Economists polled by Reuters had forecast a 4.7% unemployment rate and a 0.2% contraction in employment. While quarterly wage growth increased more than forecast, with the private sector labour cost index (LCI) excluding overtime rising 0.9%, the annual rate fell to its lowest level in two years at 3.6%. Last month, the RBNZ held the cash rate steady at 5.5%, but opened the door to monetary policy becoming less restrictive over time should inflation slow as expected. The central bank expects inflation to return to within 1% to 3% target range in the second half of this year, down from 3.3% in the second quarter. Nevertheless, spot prices remain on track to register strong gains for the second straight week as the focus now shifts to the crucial RBNZ rate decision and the US consumer inflation figures, both due on Wednesday.Key Movers
Last week number of Americans filing new applications for unemployment benefits fell more than expected last week, calming fears the labor market was unraveling and reinforcing that a gradual softening remains intact. Initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, the Labor Department said on Thursday, the largest drop in about 11 months. Economists polled by Reuters had forecast 240,000 claims for the latest week. It was a welcome reversal after last week's surprise sharp jump in jobless claims, and most likely reflects a fading in the impact from temporary motor vehicle plant shutdowns and Hurricane Beryl. The prior week's tally was revised up slightly to 250,000 from the previously reported 249,000. Looking ahead this week and the US economic docket will be busy, with traders focused on inflation data on the producer and consumer side, retail sales, building permits and consumer sentiment.Expected Ranges
- NZD/USD: 0.5900 - 0.6100 ▼
- NZD/EUR: 0.5400 - 0.5600 ▼
- GBP/NZD: 2.1150 - 2.1350 ▲
- NZD/AUD: 1.0850 - 1.1050 ▼
- NZD/CAD: 0.8100 - 0.8300 ▼