New Zealand Dollar Falls After Weak Jobs Report

2026-08-05 00:43 By Judith Sib-at 1 min. read

The New Zealand dollar fell to around $0.586, retreating from a two-month high after a weaker-than-expected jobs report raised doubts about how high interest rates may rise this year.

New Zealand's unemployment rate climbed to 5.6% in the second quarter, the highest level since the third quarter of 2015 and above the expected 5.4%, pointing to growing slack in the labor market.

Although employment increased 0.5% from the previous quarter and outpaced forecasts of a 0.1% rise, the gain was partly offset by a sharp increase in the participation rate.

Meanwhile, annual wage growth remained subdued at 2.0%, suggesting wage pressures are unlikely to fuel inflation and reducing the case for an aggressive tightening cycle.

Still, markets continued to price in a September rate hike after the Reserve Bank of New Zealand signaled last month that further tightening would likely be needed to reduce monetary stimulus and keep inflation under control.



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