Dollar dips below US70c, hit by surprise unemployment stat
Updated 2:31 PM Thursday Feb 4, 2010

Unemployment in New Zealand - the last five years. Seasonally adjusted unemployment rate. Source: Statistics NZ/ Herald Graphic.

The New Zealand dollar has fallen to below US70c today, after surprise jobs data showed unemployment rose to 7.3 per cent, its highest level since June 1999.

Statistics NZ said the number of unemployed New Zealanders kept climbing during the December quarter, jumping 18,000 to reach 168,000.

This is double the Labour Department forecast of a 9000 increase.

Statistics NZ says the increase in unemployment was mainly due to a rise in the number of people entering the labour force but unable to find work.

The New Zealand dollar initially fell from 70.8 USc to 70.1 USc on the news and has now fallen to 69.9 USc.

Westpac markets strategist Imre Speizer said today's surprise unemployment statistics would be a major test of the Kiwi dollar's strength.

"What [the employment statistics] have done is push [the Kiwi dollar] perilously close to this key 69 to 70 area," he said.

"It's really around the 70c mark that is the stronghold.

"So what we are seeing is buyers coming in when it gets down to around 70c, like at the moment."

He said that if the dollar pushed any lower buyers would stand back and wait for the dollar to get cheaper.

"Everybody is watching 70c, and you can't say it will or it won't break it, it's just a matter of watching whether there are more buyers or sellers around this level.

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