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Weekly Roundup: Unemployment rate surge leaves New Zealand dollar on back foot

currency-newsWeekly Roundup: Unemployment rate surge leaves New Zealand dollar on back foot
New Zealand dollar exchange rates slumped sharply in the wake of the fourth quarter labour market data, which showed the unemployment rate leaping from 3.9% to 4.3% at the end of 2018.

As the increase in unemployment was driven by a weakening participation rate this exacerbated worries over the outlook of the New Zealand labour market.

All in all, confidence in the underlying strength of the New Zealand economy remains distinctly limited, especially in the face of deteriorating global trade.

If the Reserve Bank of New Zealand (RBNZ) maintains a dovish policy bias at its February policy meeting this could see NZD exchange rates extending their decline further.

Markets were caught off guard by the dovish nature of comments from Reserve Bank of Australia (RBA) Governor Philip Lowe, meanwhile.

As Lowe indicated that the next interest rate movement could be either up or down this left the Australian dollar on the back foot against its rivals.

Unless business and consumer confidence indexes surprise to the upside AUD exchange rates are likely to remain under pressure this week.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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