WELLINGTON (Reuters) – New Zealand’s jobless rate fell to an equal record low in the third quarter, beating expectations and sending the dollar higher as markets bet the data will prompt a further hike in interest rates later this month.

The unemployment rate fell to 3.4% in the quarter ending September, Statistics New Zealand data showed, far lower than a forecast of 3.9% by economists polled by Reuters.

“The strong decline in unemployment brought the rate down to New Zealand’s lowest rate on record, matching December 2007, when it was also 3.4%,” work and wellbeing statistics senior manager Becky Collett said.

Wage growth was strong in the quarter with the private sector labour cost index (LCI) recording a 0.7% lift, though just below a forecast 0.8% increase.

The seasonally adjusted employment jumped 2.0% in the quarter, beating forecasts of a 0.4% increase. The participation rate rose to 71.2%, higher than the 70.6% forecast.

The New Zealand dollar rose more than 0.2% after the data to top $0.7125, as markets forecast the tightening labour market would force another interest rate hike this month.

The Reserve Bank of New Zealand (RBNZ) will meet on Nov. 24 to review monetary policy settings after hiking rates for the first time in seven years last month.

“With underlying inflation also above the RBNZ’s target in Q3, today’s data raise the risk of a 50 basis point rate hike by the RBNZ in November,” said Ben Udy, economist at from Capital Economics.