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 says.
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 correction."
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, he said.
Recent Australian data, including the employment rate falling in September, provided some contrast to the New Zealand outlook.
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.