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Talking Points:

  • NZ unemployment rate jumps to 4.3 percent in 4Q 2018 compared to 3.9 percent reported in the previous period
  • Employment growth continues to weaken as a slowing global economy and international uncertainty cripple New Zealand’s job market

The New Zealand Dollar is selling off after several economic indicators that represent the country’s job market fell short of survey estimates. The data release highlighted a sizeable uptick in the 4Q 2018 unemployment rate which edged up from 4.0 percent to 4.3 percent. In addition, year-over-year employment growth declined from 2.8 percent down to 2.3 percent. This compares to expectations of 4.1 percent and 2.6 percent for the unemployment rate and employment change gauges respectively.

NEW ZEALAND UNEMPLOYMENT RATE: QUARTERLY TIME FRAME (JUNE 2007 TO DECEMBER 2018)

New Zealand Unemployment Rate Price Chart 4Q 2018

The unemployment rate for the period fell short of expectations for the first time since 4Q 2016 but remains below recent historical levels and comes subsequent to the prior period’s healthy reading of 3.9 percent.

NEW ZEALAND EMPLOYMENT CHANGE YEAR OVER YEAR: QUARTERLY TIME FRAME (JUNE 2007 TO DECEMBER 2018)

New Zealand Employment Change YoY Price Chart 4Q 2018

As for the employment change metric, the year-over-year rate at which New Zealand’s economy adds jobs has been trending downward since 3Q 2016. This movement looks to continue as uncertainty surrounding the country’s economy due to adverse impacts from slowing global growth and the US-China trade war cripples business plans to expand.

NZDUSD CURRENCY PRICE CHART: 15-MINUTE TIME FRAME (FEBRUARY 06, 2019 INTRADAY)

NZDUSD Currency Price Chart Response to New Zealand 4Q 2018 Employment Data

So far today the Kiwi Dollar is trading nearly 2 percent lower against the Greenback with the currency pair dropping from the 0.683 level to the 0.677 area immediately following the NZD employment data release. Take a deeper look at NZDUSD technical analysis here to see where the Forex pair could head next.

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Written by Rich Dvorak, Junior Analyst for DailyFX

Follow on Twitter @RichDvorakFX

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