New Zealand Dollar Slips After Weak Jobs Report

The New Zealand dollar slipped to $0.558 on Wednesday, hitting a more than three-week low, as weak jobs data reduced expectations of further rate hikes by the Reserve Bank. The unemployment rate rose to 5.7% in the third quarter, up from 5.6% in the previous quarter and above forecasts of 5.5%. This marked the highest level in eleven years. Employment also fell 0.1% over the quarter, against forecasts of a 0.4% increase. The figures suggest continued slack in the labor market and highlight the fragility of the economic recovery, as elevated oil prices and uncertainty ahead of the November 7 election weigh on business confidence and hiring activity. The deterioration in labor-market conditions casts doubt on the need for further monetary tightening. Markets have lowered the probability of a December rate hike to below 50%, down from around 75% the previous day.