Forex News: Kiwi Falls As New Zealand Unemployment Rate Jumps

Kiwi Falls As New Zealand Unemployment Rate Jumps To Highest Since 2015

(RTTNews) - The New Zealand dollar weakened against other major currencies in the Asian session on Wednesday, as the jobless rate in New Zealand rose to its highest level since September 2015 in the second quarter of 2026.

Data from Statistics New Zealand showed that the jobless rate in New Zealand came in at a seasonally adjusted 5.6 percent in the second quarter of 2026. That missed expectations for 5.4 percent, which was unchanged from the previous three months following an upward revision from 5.3 percent.

Overall employment saw an increase of 0.5 percent on quarter, beating forecasts for a gain of 0.1 percent and up from 0.2 percent in the three months prior.

The participation rate ticked up to 70.7 percent from 70.4 percent in the first quarter. The Labor Cost Index rose 0.7 percent on quarter and 2.1 percent on year after adding 0.5 percent on quarter and 2.0 percent on year in the previous quarter.

The Reserve Bank of New Zealand's (RBNZ) aggressive rate hikes have been undermined by the rise in New Zealand's unemployment rate.

In economic news, data from S&P Global showed that China's services activity expanded at the weakest pace since September 2024 as new business moderated for the second month and optimism eased to the lowest in more than six years.

The headline RatingDog China services Purchasing Managers' Index fell to 50.4 in July from 54.1 in June. Nonetheless, a score above 50.0 indicates expansion.

Activity expanded every month since January 2023, but the score signalled the weakest growth since September 2024.

The US ADP Employment and ISM Services Purchasing Managers' Index (PMI) figures are expected by traders later on Wednesday. On Friday, everyone will be watching the US July data.

Meanwhile, the possibility of an interim agreement to reopen the Strait of Hormuz and hopes for a settlement between the US and Iran could help minimize the NZD's losses.

Asian stock markets traded higher, boosted by markets in South Korea, Taiwan and Japan amid strong gains in technology stocks as well as tumbling crude oil prices that eased global inflation concerns on reports of an interim deal between the US and Iran to reopen the Strait of Hormuz.

US Treasury Secretary Scott Bessent claimed the U.S. and Iran could reach a deal to reopen the Strait of Hormuz over the next couple days. He added that it would be freedom of movement, indicating that the traffic would be free for all international ships.

Bessent predicted that when hundreds of ships stranded in the Persian Gulf start moving, oil and energy prices would fall eventually.

Later, Qatar confirmed that mediatory efforts to secure U.S.-Iran deal are progressing well.

In the Asian trading today, the NZ dollar fell to 2-day lows of 1.9656 against the euro and 1.2008 against the Australian dollar, from yesterday's closing quotes of 1.9628 and 1.1993, respectively. If the kiwi extends its downtrend, it is likely to find support around 2.00 against the euro and 1.22 against the aussie.

Against the U.S. dollar and the yen, the kiwi edged down to 0.5866 and 92.40 from Tuesday's closing quotes of 0.5876 and 92.66, respectively. The kiwi may test support around 0.56 against the greenback and 91.00 against the yen.

Looking ahead, PMI reports from major European economies and the U.K. for July, Eurozone PPI for June are slated for release in the European session.

In the New York session, U.S. MBA mortgage approvals data, U.S. ADP weekly employment data, U.S. ISM services PMI for July and U.S. EIA crude oil data are set to be released.

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