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Asia, Forex

New Zealand unemployment rate falls to 11-year low in Q2

WELLINGTON, Aug 6 (Reuters) – New Zealand’s unemployment rate unexpectedly fell to an 11-year-low in the second quarter while wages rose, data showed on Tuesday, sending the domestic currency soaring. The decline in the unemployment rate to 3.9%, which is the lowest since the June 2008 quarter, reflected a fall in the number of unemployed males, Statistics New Zealand said in a statement. Economists polled by Reuters had forecast the unemployment rate to rise 4.3% from 4.2% in the previous quarter. Wages rose 0.8% slightly faster than the 0.7% expected in a Reuters poll. Employment rose 0.8% in the quarter, compared with a 0.2% decline in the previous quarter and a 0.4% rise in a Reuters poll. Following the announcement, the New Zealand dollar shot up 0.7% to as high as $0.6585 from lows of around $0.6527 before the release. The currency has been under pressure from expectations of an interest rate cut on Wednesday and a recent escalation of the U.S.-China trade war. All 16 economists polled by Reuters are expecting the Reserve Bank of New Zealand to cut the benchmark interest rate by 25 basis points, and keep the door open for more easing. “This data will not affect the RBNZ’s OCR (official cash rate) decision tomorrow – we still think a cut is all but assured,” said Westpac Senior Economist Michael Gordon. ANZ Bank expects the RBNZ to cut OCR three times this year. “Since late 2012, the seasonally adjusted unemployment rate has largely been tracking down, towards levels seen before the global financial crisis in 2008,” said Sean Broughton, labour market and household statistics senior manager at Statistics New Zealand. The participation rate was unchanged at 70.4%. (Reporting by Praveen Menon; Editing by Sam Holmes)

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