The "horrible" September unemployment numbers should mean the
forecast top levels of the United States-New Zealand dollar
cross are not tested, BNZ currency strategist Mike Jones
Until Statistics New Zealand said unemployment was 7.3%, a
13-year high, Mr Jones had been contemplating a top end range
of US81c to US83.5c for the kiwi.
"But with the risk of a Reserve Bank interest rate cut now
very real, the topside looks unlikely to be tested. Still, we
doubt we're on the cusp of a substantial downward
The expectation of ongoing global optimism and rising New
Zealand commodity prices meant Mr Jones' year-end US82c
forecast for the kiwi still looked "about right".
In the near-term, he expected the dips to be limited to
US80.8cAny underperformance by the New Zealand currency would
be concentrated against the cross with the Australian dollar,
Recent Australian data, including the employment rate falling
in September, provided some contrast to the New Zealand
With the recent break below the A78.75 mark, the BNZ was
looking for a move back down into the A77c to A78c range in
the next few weeks, Mr Jones said.