WELLINGTON: The New Zealand dollar is heading for a 0.6 per cent gain this week as investors wait for US employment figures to gauge whether the Federal Reserve will hike interest rates this year. THE kiwi rose to 71.40 US cents at 5pm in Wellington from 71 cents on Friday in New York last week. It traded at 71.14 cents at 8am, and 71.30 cents on Thursday.
The trade-weighted index was little changed at 74.69 from 74.73 last week, and up from 74.48 on Thursday. Economists expect the US added 225,000 jobs last month, ahead of the release of the May non-farm payrolls report on Friday in Washington. The US labour market remains a key piece of data for analysts when trying to gauge whether the Fed will shift away from running its policy of a zero interest rate.
“Markets are relatively comfortable taking the Fed at their data-dependent word, and the information we’ll receive tonight is fairly important on the data dependent side of things,” said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland. Investors will turn their attention next week to the Reserve Bank of New Zealand’s policy review on Thursday.
Traders are pricing in a 44 per cent chance governor Graeme Wheeler will cut the 3.5 per cent official cash rate as inflation continues to come in below expectations, and as another weak GlobalDairyTrade auction this week puts pressure on dairy prices. The kiwi gained to 92.67 Australian cents at 5pm from 92.20 cents on Thursday, to 4.4319 Chinese yuan from 4.4203 yuan, to 63.65 euro cents from 63.28 cents and to 88.89 yen from 88.75 yen.
