THE TAKEAWAY: As-expected employment figures > No hindrance to risk-on buying > NZD holds strength
The New Zealand dollar rose moderately after employment figures for Q2 met analyst expectations. Although previous data was revised lower, higher risk appetite in the early Asian session pushed the Kiwi dollar higher against its major counterparts.
|
EVENT |
ACT |
EXP |
PREV |
|
Unemployment Rate (Q2) |
6.5% |
6.5% |
6.5% |
|
Participation Rate (Q2) |
68.4% |
68.4% |
68.6% |
|
Employment Change (QoQ) (Q2) |
0.0% |
0.0% |
1.3% |
|
Employment Change (YoY) (Q2) |
2.0% |
2.0% |
1.8% |
New Zealand Employment Change (YoY). Chart generated with Bloomberg LP Professional Terminal.
Although overall job growth rate stalled in the island nation, a breakdown of the data showed improvements in critical New Zealand industries. On a quarter-over-quarter basis, the mining industry led growth with an expansion of 20.4% from the first quarter, while the finance and insurance sector expanded 10.5%. Hospitality lost the most jobs with a decline of 6.4%, followed by wholesale and retail with -5.1%, possibly suggesting reconstruction demand is slowing down after the February Christchurch earthquakes.
The New Zealand dollar held its gains against the greenback following the jobs report, gaining around 0.300% since trading started. Higher risk appetite is buoying yield currencies including the Australian dollar and Canadian dollars after a straight week of selling ending only yesterday. The Euro was up 0.214% at the time of writing against the buck while traders await tomorrow’s ECB rate decision. US equity futures were pointing higher with the Dow +0.212%, the benchmark S&P500 +0.231% and the broader Nasdaq +0.239%.
NZDUSD 5 minute chart, line indicating time of release. Chart generated with FXCM Strategy Trader.
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