WELLINGTON (Reuters] – New Zealand’s jobless rates fell to an identical record low during the third quarter. That beat expectations, sending the dollar higher. The markets are betting that data will spur a further increase in interest rate later in the month.

Statistics New Zealand data shows that unemployment fell to 3.4% during the September quarter, which is lower than the forecasted 3.9% of economists polled for Reuters.

Becky Collett, senior manager of work and well-being statistics said that New Zealand had seen a strong drop in unemployment which brought down the rate to 3.4%. This was comparable with December 2007 when it was 3.4%.

The quarter saw strong wage growth with the private sector labor cost index (LCI), which recorded a 0.7% increase, but just under the forecast 0.8%.

Seasonally adjusted employment rose 2.0% during the quarter. This beats forecasts for a 0.4% rise. Higher than forecasted 70.6%, the participation rate rose up to 71.2 percent.

New Zealand’s dollar rose 0.2% on the news, to reach $0.7125. Markets predicted tighter labour markets would result in another increase of interest rates this month.

On Nov. 24, the Reserve Bank of New Zealand, (RBNZ), will meet to examine monetary policy after raising rates last month for only seven years.

Ben Udy, Capital Economics economist said that today’s data raised the possibility of a 50-basis point rate increase by the RBNZ in Nov. “With underlying inflation also higher than the RBNZ Target in Q3, these data are raising the risk,” he stated.