KIWI plummets after unemployment rate increase

New Zealand’s dollar fell against all its major counterparts after a report showed the jobless rate rose more than economists forecast, signaling the central bank will slow the pace of interest rate increases.

The currency ended a four-day gain versus the greenback as traders cut bets the central bank will raise rates at its policy meeting next month. Australia’s dollar traded near a three-month high against its U.S. counterpart as gains in Asian stocks and commodities boosted demand for higher-yielding assets.

“The New Zealand dollar dropped sharply this morning following the higher-than-expected unemployment rate result,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “We saw last week the central bank move toward a slightly less hawkish stance and I think this is another piece of data, which backs up that stance.”

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell