The was able to swim against the tide on Wednesday, strengthening against the more than its other competitors on positive labour market statistics. NZD/USD has gained 0.6% since the start of the day to 0.5930, hitting a weekly high.
In the second quarter, the number of people employed fell by 0.9% compared to the same period a year earlier, but this data was in line with average forecasts. At the same time, the was better than expected, rising from 5.1% to 5.2%, while 5.3% was expected. Salaries rose 0.6% for the quarter and were 2.2% higher than a year earlier — quite healthy figures above forecasts.
There is hope that the labour market is seeing a reversal in wage growth compared to the 0.4% increase in the first three months of the year. This looks like the first signs of the economy’s response to the cycle of policy easing that began a year ago. During this time, the RBNZ cut its key rate by two percentage points to 3.25%.
Labour market indicators complement statistics, which show an acceleration from 2.2% at the end of last year to 2.7% year-on-year at the end of the second quarter. Such an acceleration could be a strong argument in favour of at least pausing the rate cuts at the next meeting on August 20.
The FxPro Analyst Team