PERTH: The New Zealand dollar gained against its trans-Tasman counterpart after Australia’s unemployment rate unexpectedly rose, matching a 13-year high on a swelling labour force.
The kiwi rose to 89.13 Australian cents from 88.69 cents yesterday. It bounced from a six-year low against the greenback, trading at 65.38 US cents at 5pm in Wellington from 65.01 cents at 8am and 65.22 cents yesterday.
Australian Bureau of Statistics data today showed the unemployment rate rose to 6.3 percent in July from 6.1 percent a month earlier, as the proportion of people looking for work increased. The Reserve Bank of Australia this week kept the target cash rate unchanged at 2 percent, noting “somewhat stronger growth of employment”, and will tomorrow release its monetary policy statement.
“Australia’s unemployment was slightly higher, but overall not a bad set of numbers – the labour force growing was encouraging,” said Raiko Shareef, currency strategist at Bank of New Zealand in Wellington. “The market took the headline weakness, which saw the Aussie/kiwi lower,” he said referring to the global norm of using Australia’s currency as the benchmark for the cross-rate.
The kiwi’s strengthening against the Australian dollar underpinned support against the greenback as New Zealand’s currency attracted buyers.
BNZ’s Shareef said the kiwi failed to break below 65 US cents during Northern Hemisphere trading, and the absence of any negative local data helped it rally from the six-year low.
