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    Asian Session – Aussie extends gains but kiwi slides on poor jobs data

    The New Zealand dollar fell on Tuesday following a decline in global dairy prices and weaker-than-expected employment data. A drop in the global dairy price index pushed the kiwi down to 0.6650 against the US dollar but it managed to regain ground and rise to 0.6706 right before the jobs data. However, the latest employment and earnings figures disappointed and the kiwi slumped to 0.6653. It extended its slide to a one-week low of 0.6631 on Wednesday but recovered slightly to 0.6656 in late Asian trading.

    Employment in New Zealand fell by 0.4% in the third quarter of the year against estimates of a 0.4% gain, while wages were up 0.4% quarter-on-quarter, which was below estimates of a 0.5% rise.

    The Australian dollar recouped all of its losses from Tuesday when the rally from yesterday’s decision by the RBA to keep rates on hold fizzled out. The aussie had risen to a one-week high of 0.7218 against the greenback after the RBA gave a more upbeat assessment of economic conditions in its statement. But it fell back later in the day before resuming on an uptrend. A smaller-than-expected deficit in Australia’s trade balance and a 0.4% monthly rise in retail sales in September further boosted the Australian currency on Wednesday. The aussie touched a high of 0.7223 against the US dollar before easing to 0.7207 in late Asian trading.

    A 1% drop in factory orders in the US in September on Tuesday had limited impact on the US currency as the greenback continued to benefit from rising risk appetite. The dollar climbed to 121.37 yen earlier in today’s Asian session but eased to 121.13 yen in late trading.

    Comments by ECB President Mario Draghi weighed on the euro today. On Tuesday, Draghi reiterated the ECB’s willingness to act if necessary and that they will review policy in December’s meeting. The euro slipped to 1.0933 in late Asian trading on Wednesday. Against the pound, the single currency hit a 2½ -month low at 0.7084.

    The pound was flat at 1.5431 against the US dollar as markets await the Bank of England’s super Thursday where the Bank will release the minutes of its November policy meeting, as well as its quarterly inflation report.

    Oil prices jumped over 3% yesterday on reports of disruptions in supply in the US, Brazil and Libya. US oil futures were down 0.4% on profit taking in today’s Asian trading at $47.70.

    Looking ahead to the rest of the day, October services PMI for the Eurozone (final) and the UK will be the main data in today’s European session. In the US, the October ISM non-manufacturing composite, ADP employment change and September trade figures will be closely watched. However, all eyes will likely be on Fed Chair Janet Yellen’s testimony and a speech by New York Fed President William Dudley later in the day.

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