Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
NZ Dollar Drops as Soft Jobs Growth Reduces RBNZ Rate Hike Bets

NZ Dollar Drops as Soft Jobs Growth Reduces RBNZ Rate Hike Bets

Daniel Dubrovsky, Contributing Senior Strategist

Share:

Talking Points:

  • New Zealand Dollar fell against its major peers on softer employment data
  • While unemployment declined, y/y jobs growth was slowest since 1Q 2016
  • Local 2-year bond yields dropped pointing to reduced RBNZ rate hike bets

See how the New Zealand Dollar is viewed by the trading community at the DailyFX Sentiment Page.

The New Zealand Dollar depreciated against its major counterparts after a mostly disappointing second quarter jobs report. Starting with the good news, the unemployment rate ticked down to 4.8 percent from 4.9 percent as expected. This was the lowest reading since the fourth quarter of 2008.

Now the not so great news. Year-over-year, the number of jobs grew by 3.1% versus predictions of 4.1% growth. This was the slowest pace since the first quarter of 2016. Quarterly readings for the same measurement also fell short of estimates at -0.2% versus +0.7% expected. This was the first contraction since 3Q 2015.

After enjoying five consecutive quarters of growth, the labor force participation rate edged down to 70.0 percent from 70.6 percent. This could perhaps explain why unemployment fell amidst weak jobs growth as discouraged workers left the market.

With overnight index swaps pricing in at least one RBNZ rate hike over the next 12 months, todays timid employment figures seemed to have helped reduce some of those hawkish expectations. Indeed, 2-year New Zealand government bond yields fell as the data crossed the wires.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES