In comparatively subdued Australasian trading, the New Zealand Dollar was trading in a narrow range against the peers like the Euro.
The commodity-driven asset was little changed after domestic data showed a 4.0 per cent decline in New Zealand’s commodity prices in April.
This followed a 0.1 per cent decline in March.
The Euro to NZD pairing went on to advance during the European session as the Eurozone’s final manufacturing PMI figure for April modestly beat initial estimates.
The common currency was also supported by the news that unemployment in the currency bloc held as 11.8 per cent in March, less than level of 11.9 per cent expected.
While the unemployment level remains uncomfortably high by historic standards, current trends do appear to suggest that joblessness hit a peak and is now slowly easing.
In the opinion of London based economist Evelyn Herrmann; ‘The fear of structurally high unemployment in the Euro area is totally justified. We think that the recovery will ultimately push the jobless rate down, but it will remain above 10 per cent for many years.’
The Euro advanced on several of its peers as investors digested this latest batch of data.
However, the common currency was a little restrained as investors looked ahead to next week’s all-important European Central Bank policy meeting. This week’s inflation figures for the Eurozone reduced the odds of the central bank introducing additional fiscal policy in the near future, but the tone adopted by the financial body will still be a major driving force in the direction the Euro exchange rate takes next week.
Later on Friday higher-risk currencies like the ‘Kiwi’ were boosted by the release of unexpectedly strong US employment data.
The US non-farm payrolls report smashed expectations and the nation’s unemployment rate fell to 6.3 per cent. While this supported the US Dollar, it also contributed to the global economy’s brightening outlook and heightened risk-appetite among investors.
Next week the main economic report for New Zealand to keep an eye on is the nation’s employment figures. Economists anticipate that New Zealand’s unemployment rate will edge down to 5.8 per cent in the first quarter, with employment up 0.6 per cent in the first three months of the year.
Employment jumped by 1.1 per cent in the fourth quarter of 2014. According to Citi analysts; ‘Given the very large surge last quarter, some payback is likely even though the labour market clearly is on a tightening trend’.
Next week’s European Central Bank rate decision will also have a significant impact on the Euro to New Zealand Dollar exchange rate.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,Australian Dollar,1.4997 ,
Euro,,New Zealand Dollar,1.6061 ,