Unexpected Growth of Unemployment Drives Kiwi Down

The New Zealand dollar slid today to the lowest level in more than two months as the nation’s unemployment rate rose, even though analysts said that it would decline, and employment growth was below expectations.
The New Zealand unemployment rate climbed from 6.4 percent in the fourth quarter of 2011 to 6.7 percent in the first quarter of 2012. The reading was worse than even pessimists expected, while most specialists anticipated the rate to be at 6.3 percent. Employment grew 0.4 percent, quarter-on-quarter, compared to the average estimate of 0.5 percent. Reserve Bank of New Zealand Governor Alan Bollard hinted last week that he may decrease interest rates. An interest rate cut seems even more likely after the bad employment data.
NZD/USD fell from 0.8102 to 0.8035 as of 10:40 GMT today, while the intraday low of 0.8012 was the lowest since January 20. NZD/JPY slid from 64.92 to 64.54 and the daily minimum of 64.28 was the lowest since February 14.

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