Kiwi seen holding US dollar gain
The New Zealand dollar is likely to hold the weekend's gain against the greenback in the short-term.
The New Zealand dollar was trading at US83c this morning from US82.45c on Friday before the release of soft US payrolls data.
OM Financial senior foreign exchange and derivatives advisor Stuart Ive said there was a "knee-jerk reaction" to the weak US data on Friday, which led to the greenback being sold and investors buying the kiwi.
The US Federal Reserve said it expected the payrolls data to be revised upward but Ive said that in the meantime the New Zealand dollar would hold its gains.
The US added 74,000 jobs in December, short of the 200,000 job ads expected by the market, he said. This was the smallest increase since January 2011.
The unemployment rate dropped from 7 per cent to 6.7 per cent, Ive said, but this was due to people leaving the labour market.
The recent severe weather in the US had also affected the figures, with the lowest participation rate since 1978.
The Federal Reserve expected the number to be revised, but in the meantime the kiwi would continue trading at present levels.
Ive expected the New Zealand dollar to trade between US82.75 and US83.20c today, with the potential to go as high as US83.80c.
The kiwi was slightly lower against the aussie, down at A92.17c from A92.64c on Friday.
However, there was no major reason for the drop, Ive said.
The New Zealand dollar was trading in a similar "channel" against the Australian dollar that it had done in recent weeks.
Ive said he expected the kiwi to stay within the range of A91.50 and A'c in the short-term.
- © Fairfax NZ News