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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