Kiwi in brief skid after weak jobs data, Aussie pressured by dovish RBA turn
TLT•The New Zealand dollar fell after the jobless rate rose to 5.7% in the third quarter and employment declined, while markets cut the chance of a December rate hike to 57%. The Australian dollar recovered after a dovish shift by the Reserve Bank of Australia prompted markets to price in just 6 basis points of tightening by early next year and 23 basis points of rate cuts by year-end.
1. New Zealand jobs weaken
The New Zealand dollar hit a three-week low after third-quarter unemployment climbed to 5.7%, its highest level since 2015, and employment unexpectedly fell. Markets reduced the probability of a Reserve Bank of New Zealand rate rise next month to 57%, from nearly 80% before the data; two-year swap rates fell 9 basis points to 3.7519%.
2. Australia rate outlook shifts
The Australian dollar was 0.2% higher at $0.6977 after falling 0.5% overnight. The Reserve Bank of Australia raised its cash rate to 4.85% in a 6-3 vote on Tuesday and dropped its tightening bias; markets priced in 6 basis points of further tightening by early next year and 23 basis points of easing by the end of next year.
