New Zealand dollar buyers surfaced on the Asian session following the release of an uplifting labor cost report in Wellington.  According to Statistics New Zealand’s quarterly survey, wages remained higher by 0.5% for the third three months of the year.  The figures match the 0.5% increase in the second quarter – evidence that labor costs continue to rise in the Pacific economy.  Nonetheless, the headline number falls below previously forecasted estimates of 0.8%.

Nonetheless, today’s figure may be evidence enough that inflationary pressures may be percolating in the New Zealand economy, supportive of near term rate hikes that RBNZ Governor Alan Bollard hinted at last week.  Although central bankers kept the benchmark overnight cash rate at a low of 2.5%, Governor Bollard noted that “significant impetus for demand” still remains evident – even as business confidence has remained weak.  Higher commodity prices are also helping to keep the pace of the country’s inflation higher than normal, currently at 4.6%.

With market speculation building of tonight’s Reserve Bank of Australia rate cut, the news has boosted New Zealand dollar fortunes against the US dollar.  Currently trading at 0.8074, the NZDUSD pair has risen from hitting a session low of 0.8059.