WELLINGTON: The New Zealand dollar fell to its lowest level in more than four and a half years after better than expected US employment data cemented expectations that the US Federal Reserve will raise interest rates in September.
The kiwi touched 70.25 US cents over the weekend, its lowest level since August 2010. The local currency was trading at 70.32 US cents at 8am in Wellington, from 70.44 cents at the New York close and 71.39 cents at 5pm in Wellington on Friday. The trade weighted index dropped to 74.01 from 74.69 on Friday.
The US dollar index, which measures the greenback against a basket of currencies, rose after the US non-farm payrolls report showed employers added 280,000 jobs last month, ahead of the 225,000 expected and the biggest gain in five months. That bolstered the case for the Fed to hike interest rates from near zero by September.
“The US dollar soared to fresh highs against many of the major currencies on the back of a solid labour market report,” Kathy Lien, managing director of FX strategy at BK Asset Management in New York, said in a note. “Traders view the May labour market report as a green light for liftoff by the US central bank.”
