Aussie advances on employment increase as Kiwi achieves record after rate hike
March 13, 2014 5:56 am
The Australian dollar bolstered versus all 16 major counterparts after data showed employers added more than three times the jobs economists projected.
Government bonds sagged down, pushing the benchmark 10-year yield to a one-month high, as full-time payrolls increased by the most in more than 22 years. New Zealand’s dollar leaped to a record on a trade-weighted basis after Governor Graeme Wheeler became the first major developed central bank head to increase interest rates since 2011 and said he expects to tighten policy further this year to thrash down inflation pressures.
“It’s a very strong jobs report, driven by full-time employment,” said Annette Beacher, the Singapore-based head of Asia-Pacific research at TD Securities Inc. “It’s a welcome relief after a soggy week. Once the rest of the world sees the number, we’ll be back to 91 cents in the Aussie.”
The Australian dollar recorded a 0.7 percent increase to 90.53 U.S. cents as of 12:23 p.m. in Sydney from yesterday. It jumped 0.7 percent to 92.96 yen and rallied 0.3 percent to NZ$1.0579.
Australian government bonds plummeted, with yields on 10-year debt adding two basis points, or 0.02 percentage point, to 4.19 percent, after earlier reaching 4.25, the topmost level since February 13.
The New Zealand dollar bolstered as high as 85.66 U.S. cents, the best performing mark since May 1, before exchanging at 85.58, 0.4 percent above yesterday’s close. It leaped 0.3 percent to 87.88 yen, after touching 88.03, the most since February 2008.
Australian Employment
In Australia, the number of people employed grows higher by 47,300 in February from the prior month, when it increased by a revised 18,000, the statistics bureau said in Sydney today. The median estimate of economists in a Bloomberg News survey was for a 15,000 increase. The unemployment rate held at 6 percent from January, corresponding the peak mark since July 2003 and in line with analyst estimates.
The Reserve Bank of New Zealand’s trade-weighted index for the kiwi skyrocketed as high as 80.10, the best moving mark for data going back to 1985 when the currency was floated.
“It is necessary to raise interest rates toward a level at which they are no longer adding to demand,” Wheeler said in a statement in Wellington after increasing the official cash rate by a quarter percentage point to 2.75 percent. The RBNZ expects to hike the rate by about 2 percentage points over two years, with the speed basing on economic data, he said.
“Strength in the currency will not impede the hiking process, which does allow the New Zealand dollar to remain strong over the coming month,” said Sam Tuck, a senior foreign-exchange manager at ANZ Bank New Zealand Ltd. in Auckland. “They are linking the exchange rate to the terms-of-trade boost, this implies that, from the RBNZ perspective, the currency is strengthening for valid reasons.” Terms of trade refers to a nation’s export earnings relative to imports.
The material has been provided by InstaForex Company – www.instaforex.com
The Australian dollar bolstered versus all 16 major counterparts after data showed employers added more than three times the jobs economists projected.
Government bonds sagged down, pushing the benchmark 10-year yield to a one-month high, as full-time payrolls increased by the most in more than 22 years. New Zealand’s dollar leaped to a record on a trade-weighted basis after Governor Graeme Wheeler became the first major developed central bank head to increase interest rates since 2011 and said he expects to tighten policy further this year to thrash down inflation pressures.
“It’s a very strong jobs report, driven by full-time employment,” said Annette Beacher, the Singapore-based head of Asia-Pacific research at TD Securities Inc. “It’s a welcome relief after a soggy week. Once the rest of the world sees the number, we’ll be back to 91 cents in the Aussie.”
The Australian dollar recorded a 0.7 percent increase to 90.53 U.S. cents as of 12:23 p.m. in Sydney from yesterday. It jumped 0.7 percent to 92.96 yen and rallied 0.3 percent to NZ$1.0579.
Australian government bonds plummeted, with yields on 10-year debt adding two basis points, or 0.02 percentage point, to 4.19 percent, after earlier reaching 4.25, the topmost level since February 13.
The New Zealand dollar bolstered as high as 85.66 U.S. cents, the best performing mark since May 1, before exchanging at 85.58, 0.4 percent above yesterday’s close. It leaped 0.3 percent to 87.88 yen, after touching 88.03, the most since February 2008.
Australian Employment
In Australia, the number of people employed grows higher by 47,300 in February from the prior month, when it increased by a revised 18,000, the statistics bureau said in Sydney today. The median estimate of economists in a Bloomberg News survey was for a 15,000 increase. The unemployment rate held at 6 percent from January, corresponding the peak mark since July 2003 and in line with analyst estimates.
The Reserve Bank of New Zealand’s trade-weighted index for the kiwi skyrocketed as high as 80.10, the best moving mark for data going back to 1985 when the currency was floated.
“It is necessary to raise interest rates toward a level at which they are no longer adding to demand,” Wheeler said in a statement in Wellington after increasing the official cash rate by a quarter percentage point to 2.75 percent. The RBNZ expects to hike the rate by about 2 percentage points over two years, with the speed basing on economic data, he said.
“Strength in the currency will not impede the hiking process, which does allow the New Zealand dollar to remain strong over the coming month,” said Sam Tuck, a senior foreign-exchange manager at ANZ Bank New Zealand Ltd. in Auckland. “They are linking the exchange rate to the terms-of-trade boost, this implies that, from the RBNZ perspective, the currency is strengthening for valid reasons.” Terms of trade refers to a nation’s export earnings relative to imports.
The material has been provided by InstaForex Company – www.instaforex.com
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