NZ dollar dragged lower by Aussie

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The New Zealand dollar was heading for a 0.7 per cent weekly decline, after being dragged lower a weaker Australian dollar, as traders await US payrolls data today.

A mixture of New Zealand Bank notes and coins.

New Zealand currency (file picture).

Source: istock.com

The Kiwi dollar was trading at 68.34 US cents at 5pm from 68.60 cents late Thursday and from 68.85 cents a week ago. It was at 90.93 Australian cents from 90.85 cents late Thursday as the Aussie dollar traded near a six-month low at 75.13 US cents.

The Aussie was weighed by soft trade data for October, weak iron ore markets and a firmer US dollar.

The greenback has strengthened on optimism about the progress of US tax reforms, reports US President Donald Trump is confident that he can strike a deal to lift the US debt ceiling and ahead of the payrolls data with investors looking for 200,000 new jobs in November.

Sheldon Slabbert, a trader at CMC Markets, said markets may be disappointed in the payrolls figures.

While the jobs numbers might look healthy, a lack of wage growth "will probably see the US dollar sell-off," he said.

He said, however, while the Kiwi may open higher Monday, it will continue to struggle as the US Federal Reserve lifts rates while the Reserve Bank of New Zealand remains firmly on hold.

Fonterra Cooperative Group cut its forecast milk payout as expected this week, following declines in global dairy prices in four of the last five auctions and data this week showed New Zealand commodity prices slipped further in November, with dairy prices leading the pack lower.

The Kiwi traded at 77.42 yen from 77.09 yen and fell to 50.70 British pence from 51.25 pence and was largely unchanged at 58.06 euro cents from 58.09 cents. It fell to 4.5223 yuan from 4.5367 yuan while the trade-weighted index declined to 72.44 from 72.53 Thursday.

New Zealand's two-year swap rate was unchanged at 2.14 while the 10-year swap rate was unchanged at 3.07 per cent.

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