US Dollar to New Zealand Dollar (USD/NZD) Exchange Rate Climbs after US Jobs Data Prints Positively

Modified: Thursday, 7 May 2015 19:06 BST - Written by John Cameron

STORY LINK US Dollar to New Zealand Dollar (USD/NZD) Exchange Rate Climbs after US Jobs Data Prints Positively

After a long succession of less-than-ideal domestic data results, the US Dollar endured a sustained bearish run.

Given that the Federal Reserve indicated that a benchmark rate increase would be subject to domestic data results, futures traders pared bets as to the timing of a lending rate increase following the string of disappointing data publications.

However, Thursday’s North American economic data printed positively, causing the US Dollar to strengthen versus many of its major peers.

Continuing Claims hovered near a 15-year low at 2.2 million, slightly below the median market forecast of 2.27 million claimants. Additionally, Initial Jobless Claims came in under the market consensus of 279,000, with the actual result hitting 265,000.

‘On a rounded basis, the unemployment rate was unchanged at 5.5% in March. Based on the decline in the insured unemployment between the household survey weeks in April and March, and our expectation for better job growth in April, we forecast that the unemployment rate ticked down to 5.4% from 5.5%,’ stated Research Analysts at Nomura.The US Dollar to New Zealand Dollar (USD/NZD) exchange rate is currently trending in the region of 1.34551.

Given the complete absence of domestic data to curb the trend, the ‘Kiwi’ (NZD) continued to soften versus the majority of its most traded currency rivals.

The declination was initiated by particularly disappointing unemployment data early in the week. Additional losses can be linked to mounting speculation that the Reserve Bank of New Zealand (RBNZ) will be forced into cutting the benchmark interest rate in order to combat deflationary pressures from low commodity prices. ‘We think that the case for easing policy has been strengthened considerably by Tuesday’s data,’

Deutsche Bank New Zealand chief economist Darren Gibbs said in an e-mailed note. The RBNZ’s next round of forecasts in June ‘will provide sufficient rationale for some policy easing and no obvious rationale for delay,’ he said.


In addition to deflationary pressure, the RBNZ have complained about the ‘Kiwi’ overvaluation which could also prompt intervention. ‘The appreciation in the exchange rate, while [New Zealand’s] key export prices have been falling, is unwelcome.’The US Dollar to New Zealand Dollar (USD/NZD) exchange rate was trending within the region of 1.3282 – 1.3465.

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