Gareth Vaughan talks with HiFX Senior Dealer Dan Bell about the week's currencies moves, including a look at key United States jobs data.
The US Labor Department will release its non-farm payrolls employment report tonight (NZ time) for June, which is one of the most closely watched pieces of economic data out of the US. This comes after another week where the New Zealand dollar has been one of the stronger performing currencies. It hit levels against both the US dollar and British pound not seen since before the New Zealand dollar floated in 1985 rising to US83.3 cents and more than 52 pence.
Meanwhile, the non-farm payrolls data closely follows separate US jobs data from ADP Employer Services which showed a 157,000 increase in June, well ahead of the median forecast of economists surveyed by Bloomberg News of 70,000.
"Last night we had a precursor employment data - the ADP data - which came out twice as good as the market was expecting," Bell said.
"So suddenly the market has revised up their expectations for the non-farm payrolls data tonight from around 75,000 new jobs to over 100,000 new jobs, and you've got some analysts who are thinking the jobs number may actually come in over 150,000 new jobs with unemployment to remain steady around 9% to 9.1%."
"So potentially that's quite positive (US) employment data."
Statistics New Zealand's delaying the release of the first quarter Gross Domestic Product (GDP) figure, which had been due on Thursday to next Thursday, July 14, had also been a talking point this week. See Alex Tarrant's story here.
Bell said there were a couple of conspiracy theories doing the rounds.
"If you wanted to be a conspiracy theorist there are a couple of things you could say about that (delay). Perhaps it was a lot better than it was expected to be, but on the other hand maybe it was a lot worse," Bell said.
"It's kind of hard to say really. It's very much a historical piece of news and it does take into account that first quarter where there was a lot of uncertainty associated with the Christchurch earthquake so it's going to be interesting once it is finally released."
Statistics New Zealand said the delay was because it wanted to ensure its methods for measuring GDP had adequately accounted for the Christchurch earthquakes. A Reuters survey of economists pointed to GDP rising 0.4% in the March quarter, while Treasury and the Reserve Bank are tipping a 0.3% rise in the three months to March from the December quarter.
Dan Bell is the Senior Dealer at HiFX, a UK-headquartered foreign exchange dealer with significant operations in Australia and New Zealand. It has a dealing room in Auckland. See more detail here.