2014.07.0705:05:51UTC+00Kiwi tumbles on US rate hike speculation

The New Zealand dollar plunged following a firm US employment data pressed market speculation the Federal Reserve would increase interest rates sooner than anticipated.

The kiwi traded at 87.18 US cents in Wellington, down from Friday’s 87.49 US cents.

The US dollar strengthened following US Labor Department figures late last week reflected 288,000 jobs were added in June while unemployment dived 6.1% from 6.3% in May.

"Until that payrolls number came out the sense was that the Fed was likely to maintain interest rates at a very low level, and have an extended period of low interest rates," said Garry Dean, Trader at CMC Markets.

The New Zealand dollar inched lower to 93.14 Australian cents in Wellington, from 93.21 Australian cents at New York close.