New Zealand Dollar Rallies as Unemployment Data Beats Expectations
- The New Zealand quarterly unemployment rate fell to its lowest level since December 2008
- The New Zealand Dollar rallied nearly 1 percent against its major counterparts following the data
- Unemployment for the third quarter fell to 4.6 percent from 4.8 in the previous quarter
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The New Zealand Dollar rose more than half of a percent against its major counterparts as the third quarter unemployment rate came in lower than analyst expectations. The unemployment rate fell to 4.6 percent from 4.8 percent in the previous quarter. Employment in New Zealand increased 4.2 percent in the third quarter of 2017 compared to a 3.1 percent rise during the same period in 2016. Employment from the previous quarter rose 2.2 percent; both quarterly and yearly changes were larger than analyst expectations.
The better-than-expected employment data likely pushed the New Zealand dollar and rate hike expectations for 2018 higher, as wages also reported better than expected growth. Overnight swaps are currently pricing in a 92.4 percent probability of a hike in November of 2018, higher than yesterday’s 89.2 percent reading. The next Reserve Bank of New Zealand rate decision will be held on November 9.
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