Currency Alerts
11/5/2009 12:44 AM ET
(RTTNews) -
Thursday in Asia, the New Zealand dollar plummeted against its major counterparts following disappointing jobs data and a warning from the head of the central bank about the country's slow and vulnerable emergence from recession.
The NZ dollar tumbled to a fresh 3-month low against the Aussie and a 2-day low against the euro.
The jobless rate in the third quarter increased to 6.5 percent from 6 percent in the previous three months, Statistics New Zealand said in Wellington today. Companies shed twice as many workers as economists forecast and the number of people out of work climbed to a 15-year high.
The number of unemployed people increased by 12,000 to 150,000 in seasonally adjusted terms. It was the highest number of unemployed New Zealanders since the March 1994 quarter.
Employment dropped 0.8 percent, or about 17,000 jobs, in the third quarter, today's report showed. Economists expected a 0.3 percent decline.
Finance Minister Bill English said yesterday he expects the jobless rate will rise to about 7 percent by mid-2010, less than the 8 percent peak the government estimated in its May budget.
Rising unemployment and a stronger currency may hamper the nation's recovery from the worst recession in three decades. The Reserve Bank of New Zealand Governor Bollard warned today the rebound will be slow and said currency traders betting New Zealand's economy can keep pace with neighboring Australia may get it wrong.
Bollard issued a warning to foreign exchange markets today, saying they need to differentiate between New Zealand and Australian economies.
Financial markets and businesses needed to appreciate the different futures the two countries were charting out of the global financial crisis, he said.
Speaking to the trans-Tasman business circle in Auckland, he said both countries had survived the crisis well, due to a mix of strong institutions and stimulative policies.
"New Zealand has had a recession, and the pick-up is slower and more vulnerable," than Australia, Governor Bollard said in Auckland.
"This is particularly evident in the relatively stable cross-rate on foreign exchange markets. If financial markets can't see the differences, they will eventually lose money, and it will hurt the New Zealand economy."
The New Zealand dollar fell to 1.2641 against the Aussie during Asian deals on Thursday. This set the lowest point for the kiwi since August 04. On the downside, 1.272 is seen as the next target level for the NZ dollar. At yesterday's close, the aussie-kiwi pair was quoted at 1.2584.
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