Forex: NZD/USD aiming to retest NZ jobs low

FXstreet.com (Barcelona) - The New Zealand Dollar continues to trade vulnerable to further losses after the Antipodean country unemployment rate unexpectedly went up to 6.7% in Q1 from a revised 6.4% in the prior quarter. NZD/USD trades at 0.8050, closing in to session lows at 0.8039.

A break below 0.8080 (appears to have been confirmed) risks substantial losses for the kiwi, says Michael Boutros and David Song, Currency Analysts at DailyFX: "Subsequent daily support targets eyed at the 50% retracement at 7965 and the confluence of channel support and the 61.8% retracement at 7845."

The reason behind the latest surge in the jobless rate was sue to an increase in the labour force, which swelled to a three-year high as more people started looking for work.

The spike in the 1Q unemployment rate to 6.7% from a revised 6.4% was on the back of a surge in the participation rate, particularly of woman, in the labor force, says TD Securities Head of Asia Pacific Annette Beacher cited by Dow Jones. "Treat this report with caution, as will the RBNZ." The employment rate, up 0.4% on the quarter, is about the only indicator "that makes sense," she says.

"We saw increases in both the number of people in work and the number out there looking for work in the March 2012 quarter," industry and labour statistics manager Diane Ramsay said in a statement. "This meant participation in the labour force rose to the highest level since its peak just over three years ago."

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