New Zealand Dollar Rallies as Jobs Data Boosts RBNZ Outlook
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- NZ Unemployment Rate Unexpectedly Fell to 5.4% in 3Q vs. 5.6% in 2Q
- Employment Grew 3.2% y/yin 3Q vs. 3.0% Expected, 3.7% in 2Q
- NZ Dollar Rose as Upbeat Jobs Data Supported RBNZ Policy Outlook
New Zealand’s Unemployment figures were better than expected, with the jobless rate falling to 5.4 percent in the third quarter. The outcome was better than the 5.5 percent result expected by economists and marked a decline from 5.6 percent recorded in the second quarter. Overall employment grew at a year-on-year pace of 3.2 percent, which marked a slowdown from the 3.7 percent seen in the three months through June but proved better than the 3.0 percent consensus forecast.
The New Zealand Dollar rallied once the figures hit the wires, extending earlier gains against the major currencies. With the employment data showing a stronger than expected labor market, investors likely saw a greater probability of future RBNZ interest rate hikes. Indeed, the Kiwi’s ascent mirrored a jump in New Zealand’s benchmark 10-year bond yield, a proxy for policy bets. It should be noted however that the RBNZ kept its policy rate unchanged and appeared to set out a more dovish tone last week.
NZD/USD 5min Chart - Created Using FXCM Marketscope
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