NZD/USD dives to one-month lows, below mid-0.7100s amid notable USD demand
|- NZD/USD remained under some heavy selling pressure for the third consecutive session on Friday.
- The USD jumped to three-month tops and turned out to be a key factor dragging the pair lower.
- Investors now look forward to the US monthly jobs report for some meaningful trading impetus.
The USD buying picked up pace during the early European session and dragged the NZD/USD pair to one-month lows, around the 0.7135 region in the last hour.
The pair extended this week's rejection slide from the 0.7300 round-figure mark and witnessed some follow-through pressure for the third consecutive session on Friday. The US dollar added to the previous day's strong momentum and jumped to three-month tops. This, in turn, was seen as a key factor that continued exerting pressure on the NZD/USD pair.
The Fed Chair Jerome Powell – speaking at an online event hosted by the Wall Street Journal – largely dismissed concerns over the recent sharp rise in long-term yields. Powell's remarks disappointed some investors and triggered a violent sell-off in the US fixed income market, pushing the bond yields higher and boosting demand for the greenback.
Meanwhile, the bond market rout fueled fears about distressed selling in other asset classes and took its toll on the global risk sentiment. This was evident from a weaker tone around the equity markets, which further benefitted the USD's relative safe-haven status. This was seen as another factor that drove flows away from the perceived riskier kiwi.
Friday's focus will remain on the closely watched US monthly jobs report – popularly known as NFP. The US economy is anticipated to have added 182K jobs in February, up sharply from 49K in the previous month. The unemployment rate is expected to hold steady at 6.3%. The data will influence the USD and produce meaningful trading opportunities around the NZD/USD pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.