New Zealand dollar off highs

The New Zealand dollar hit a three-year high on Thursday but stalled before a post-float, three-decade peak as the Australian dollar sagged in disappointment at employment data and Chinese trade figures. The kiwi was hovering at $0.8820, having stretched as far as $0.8839. A break above $0.8842 would return it to territory last visited in 1985. Its trade-weighted index is already at a post-float high.
The kiwi retreated from a three-month high versus the yen and pulled away from a 14-month top on the euro. But traders said any downside for the kiwi would probably be limited thanks to the prospect of further interest rate rises. The pullback came as sellers took aim at the Aussie after Australia's jobless rate unexpectedly rose to 6.0 percent in June, matching a decade high seen earlier in the year.
The Aussie fell as low as $0.9396 from a session high of $0.9459. It had initially risen after the same report showed 15,900 jobs were created in June, ahead of the consensus for 12,000. Still, the pace of job growth has slowed from the first quarter and analysts suspect the jobless rate will stay at 6.0 percent or edge slightly higher in the months to come.
"A lift in the unemployment rate could see the RBA step further away from signalling rate hikes. However, it should not come as a surprise for the RBA and it will unlikely shift its 'on hold' stance," said Janu Chan, senior economist at St George. Further weighing on the Aussie, China's exports grew less than expected in June, offering no conclusive evidence yet on whether the economy can stabilise without additional government stimulus measures. The Aussie chalked up losses against the euro and yen as well. On the kiwi, it slipped to NZ$1.0652, nearing a three-month low of NZ$1.0633 plumbed last week.
Three-year bond futures scaled an 11-month peak of 97.390, while the 10-year contract set a 12-month high of 96.530. Australia's 10-year cash yield fell to 3.530 percent, reaching lows not seen since June 2013. New Zealand government bonds traded with a firmer tone as well, sending yields 1.5 basis points lower across the curve.