New Zealand dollar jumps as unemployment rate drops

The New Zealand dollar is the best-performing major currency in Asia today in the wake of strong labour market data.

The country’s unemployment rate fell to 4.9 per cent in the three months ended March 31 from 5.2 per cent in the December quarter, according to Statistics New Zealand. This was a better result than the 5.1 per cent economists had pencilled in.

It was the equal-lowest level since the December quarter of 2008, matching the September quarter of last year and the December quarter of 2015.

Employment grew 1.2 per cent quarter on quarter in first three months of the year, from a revised 0.7 per cent (previously 0.8 per cent) at the end of last year. This was a much better outcome than the 0.8 per cent growth economists expected.

The annual rate of employment growth eased by one-tenth of 1 percentage point to 5.7 per cent in the March quarter, but was stronger than December quarter’s 5.3 per cent pace.

Wage growth was steady at 0.4 per cent.

All up, currency markets reacted positively to the numbers, with the Kiwi dollar up one-third of 1 per cent at $0.6957. The currency had gained as much as 0.5 per cent in early trade.

On Friday, the NZ dollar hit a 10-month low.