The New Zealand dollar fell on Wednesday during Asian
trading despite the country’s employment rate came down to lowest level in five
years as the economy steams ahead at a pace the Reserve Bank of New Zealand has
said will warrant a rate hike soon.
Data released on Wednesday by Statistics New Zealand showed
that country’s unemployment rate fell to 6% in Q4 from 6.2% in previous
quarter, and in line with expectations. This is the lowest level since Q2 of
2009. Other data released on Wednesday showed the number of employed people in
the country rose to 1.1% in Q4 against an expectation of +0.6% and +1.2% in Q3.
In Australia, the Australian Industry Group (AIG) Services
Index rose to 49.3 from 46.1.
In Japan the December cash earnings data will be released at
1030 Tokyo (0130 GMT). Revised wages data released on January 17 showed that
the total average monthly cash earnings per regular employee in Japan rose 0.6%
from a year earlier in November, the first y/y rise in five months after -0.1%
in October, led mostly by overtime. But base wages slumped 0.6% on year, the
18th straight y/y drop.
USD/JPY rose 0.07% at 101.71, AUD/USD fell 0.13% at 0.8913,
while NZD/USD fell 0.24% at 0.8223.
On Tuesday the greenback gained ground against most major
currencies after investors viewed the currency as oversold in wake of Monday's
selloff stemming from a poor U.S. factory report.
The ISM’s manufacturing purchasing managers’ index came in
at 51.3 in January, down from 57.0 in December. Analysts were expecting the
index to inch down to 56.4 in January.
The report added new order growth fell at its fastest rate
in 33 years, with the new orders index dropping to 51.2 from 64.4 in December.
The employment index fell from 55.8 in December to 52.3, the weakest since
June.
The soft numbers reminded investors that the Federal Reserve
will trim its USD65 billion monthly bond-buying program on a gradual basis, or
even leave it on hold if need be, while policy tightening remains far off on
the horizon.
Stimulus tools tend to weaken the dollar by suppressing
interest rates to spur recovery.
…. Read more on apexmarkets.co.nz
