3 Nov 2011

NZ dollar falls after unexpected rise in unemployment

6:49 pm on 3 November 2011

The New Zealand dollar tumbled 0.8 US cents to 78.3 US on Wednesday after new labour figures showing unemployment unexpectedly rose by 0.1% to 6.6%.

Statistics New Zealand's Household Labour Force Survey shows while an extra 5000 people found work in September, the number of unemployed rose by 3000 to 157,000.

Deutsche Bank's chief economist Darren Gibbs says the soft labour market will not put pressure on the Reserve Bank to raise interest rates soon.

He believes there is no case for tightening monetary policy in the forseeable future, enough jobs are not being generated to put downward pressure on the unemployment rate.