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Forex - NZD/USD higher as rate hike expectations support

Published 02/06/2014, 02:59 AM
Updated 02/06/2014, 02:59 AM

Investing.com - The New Zealand dollar was higher against its U.S. counterpart on Thursday, as recent news the Reserve Bank of New Zealand will hike rates at its next policy meeting in March supported demand for the kiwi.

NZD/USD hit 0.8248 during late Asian trade, the pair's highest since Tuesday; the pair subsequently consolidated at 0.8227, adding 0.16%.

The pair was likely to find support at 0.8188, Thursday's low and resistance at 0.8299, the high of January 29.

The kiwi remained supported after the RBNZ indicated last week that rates are likely to rise in March, while an upbeat fourth quarter jobs report on Wednesday also provided support.

Statistics New Zealand said the number of people employed in the three months to December increased by 1.1% or 24,000, after an additional 28,000 jobs were created in the third quarter. Market expectations had been for an increase of 0.6%.

The unemployment rate fell to 6.0% in the fourth quarter from 6.2% in the previous quarter, in line with market expectations.

The kiwi was lower against the Australian dollar, with AUD/NZD gaining 0.40% to 1.0889.

Also Thursday, official data showed that Australia's trade surplus expanded to AUD0.47 billion in December, from AUD0.08 billion the previous month. Analysts had expected the trade balance to swing into a deficit of AUD0.27 billion in December.

A separate report showed that retail sales in Australia rose 0.5% in December, more than the expected 0.4% uptick, after a 0.7% increase in November.

In addition, the National Australia Bank said its business confidence index rose to 8 in the fourth quarter from a reading of 5 in the third quarter, whose figure was revised up from an initial reading of 3.

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Later in the day, the U.S. was to publish data on the trade balance, as well as the weekly report on initial jobless claims.

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