The Australian dollar gained against all of its 16 major peers after data showed employers added more than three times the jobs economists estimated.
New Zealand’s dollar jumped to a record on a trade-weighted basis after Governor Graeme Wheeler became the first head of a major developed central bank to raise interest rates since 2011 and said he expects to tighten policy further this year to damp inflation pressures.
“It’s a very strong jobs report, driven by full-time employment,” said Annette Beacher, the Singapore-based head of Asia-Pacific research at TD Securities Inc. “It’s a welcome relief after a soggy week. Once the rest of the world sees the number, we’ll be back to 91” U.S. cents per Aussie dollar.
The Australian dollar jumped 0.7 percent to 90.49 U.S. cents as of 5:11 p.m. in Sydney from yesterday. It climbed 0.6 percent to 92.87 yen and strengthened 0.3 percent to NZ$1.0571.
Australian government bonds fell, with yields on 3-year debt adding six basis points, or 0.06 percentage point, to 2.99 percent, after earlier touching 3.07 percent, the highest since Dec. 11.
The New Zealand dollar rose as high as 85.68 U.S. cents, the strongest level since May 1, before trading at 85.62, 0.5 percent above yesterday’s close. It gained 0.3 percent to 87.85 yen, after reaching 88.04, the most since February 2008.
In Australia, the number of people employed increased by 47,300 in February from the prior month, when it rose by a revised 18,000, the statistics bureau said in Sydney today. The median estimate of economists in a Bloomberg News survey was for a 15,000 increase.
Full-time employment rose by 80,500, the most since August 1991 and the second-largest increase on record. The jobless rate held at 6 percent from January, matching the highest since July 2003 and in line with analyst forecasts.
The Reserve Bank of New Zealand’s trade-weighted index for the kiwi climbed as high as 80.10, the strongest level for data going back to 1985 when the currency was floated.
“It is necessary to raise interest rates toward a level at which they are no longer adding to demand,” Wheeler said in a statement in Wellington after increasing the official cash rate by a quarter percentage point to 2.75 percent. The RBNZ expects to bolster the rate by about 2 percentage points over two years, with the pace depending on economic data, he said.
“Strength in the currency will not impede the hiking process, which does allow the New Zealand dollar to remain strong over the coming month,” said Sam Tuck, a senior foreign-exchange manager at ANZ Bank New Zealand Ltd. in Auckland. “They are linking the exchange rate to the terms-of-trade boost, this implies that, from the RBNZ perspective, the currency is strengthening for valid reasons.” Terms of trade refers to a nation’s export earnings relative to imports.
New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, climbed to 4.02 percent, the most since November 2010.
There’s a risk that a round of mortgage-related fixings by New Zealand households will help spur the swap rate toward 4.15 percent, said Jarrod Kerr, a director of rate strategy in Sydney at Commonwealth Bank of Australia.
Australia’s dollar trimmed gains after data showed industrial production and retail sales in China grew less than economists estimated. Industrial output rose 8.6 percent in the January-February period from a year earlier, China’s National Bureau of Statistics reported today. Retail sales grew 11.8 percent this year through February. The median estimates of analysts surveyed by Bloomberg were for increases of 9.5 percent and 13.5 percent increases, respectively.
China is the biggest trading partner for both Australia and New Zealand.