New Zealand reported a 0.4% quarter-on-quarter increase in employment for Q2 2024, contrary to expectations of a 0.2% decline. The country’s jobless rate also turned out better than expected at 4.6%, a notch lower than the 4.7% consensus.

Wage growth beat estimates as well, with the labor cost index showing a 0.9% quarterly gain versus the projected 0.8% uptick. Labor force participation also improved a couple of percentage points to 71.7%.

However, the previous quarter’s figures saw some downgrades, as the employment change was lowered from a 0.2% dip to a 0.3% decline while the unemployment rate was revised from 4.3% to 4.4%.

Link to New Zealand’s Labor Market Statistics for Q2 2024

New Zealand Dollar vs. Major Currencies: 5-min

Overlay of NZD vs. Major Currencies Chart by TradingView

The New Zealand dollar, which had been treading mostly sideways leading up to the jobs report, had a sharp bullish reaction to the stronger than expected results.

Even after a slight dip an hour after the actual release, the Kiwi was able to hold its ground and extend its rally as more Asian session traders got wind of the upbeat jobs numbers, which likely dampened expectations for a dovish shift by the RBNZ in their upcoming policy decision.

NZD chalked up its largest gains versus JPY, which was also being driven by the unwinding of carry trade then, followed by the Swiss franc and the U.S. dollar as risk appetite improved early Tuesday.