Dollar stays strong against Australia

The New Zealand dollar continued to gain slightly against the Aussie yesterday, despite an improvement in iron ore prices, and held steady against the greenback ahead of key US jobs data.

The kiwi was at US70.76c at 5 pm yesterday from US70.63c at 8am and US70.75c late on Thursday. It traded at A95.70c from A95.60c late on Thursday.

Tim Kelleher, head of institutional foreign exchange sales at ASB Bank, said the market had been “washing around” ahead of US jobs data expected overnight. The “non- farm payrolls data will be the focus of it all. I would imagine it would be a very good number.”

Yesterday, the US ADP employment survey showed 253,000 jobs added in May, compared with a forecast 180,000, boosting speculation the non- farm payrolls data would be strong.

A better- than- expected number will give the US dollar a lift and weigh on both the kiwi and the Aussie, said Kelleher. He noted, however, New Zealand dollar trading was likely to be thin given Monday would be a holiday.

He said the Aussie recovered slightly on the day because of an improvement in iron ore but noted it barely budged against the kiwi. The most- traded iron- ore contract on China’s Dalian Commodity Exchange was up 1.2 per cent, after shedding about 15 per cent over the past six sessions. The kiwi, however, remained around a four- month high against the Aussie on optimism the economic outlook favours the kiwi over its transtasman counterpart.

Looking ahead, Kelleher said the main focus will the US Federal Reserve’s mid- June policy meeting.

The trade- weighted index was at 76.53 from 76.40. The kiwi traded at 63.07 euro cents from 62.91 cents late on Thursday and at 54.95 British pence from 54.97 pence. It rose to 4.8218 yuan from 4.8028 yuan and traded at 78.96 yen from 78.50 yen.