NZD/USD refreshes day’s high around 0.6300 as DXY remains subdued, US NFP in focus
|- NZD/USD has printed an intraday high at 0.6300 as DXY has turned sideways ahead of US NFP.
- Investors have ignored the weak NZ labor market data.
- Escalating US-China tensions could impact the antipodean significantly.
The NZD/USD pair is advancing sharply higher as investors have shrugged-off vulnerable employment data. The asset is likely to display a ‘Double Distribution’ trading session as a decent rally has been witnessed after an upside break of morning inventory distribution and further distribution is highly expected. The major has climbed to the round-level resistance of 0.6300.
On Wednesday, Stats NZ reported that the Unemployment Rate increased to 3.3% from the estimates of 3.1% and the prior release of 3.2% in the second quarter. Also, the Employment Change for the second quarter has landed at 0%, significantly lower than the estimates of 0.4% and the prior print of 0.1%.
The ineffectiveness of the kiwi economy in generating job opportunities has created immense trouble for the Reserve Bank of New Zealand (RBNZ). Price pressures are soaring in the NZ economy and the RBNZ was expecting decent performance from the labor market to get strengthened for hiking the Official Cash Rate (OCR) unhesitatingly. Now, crippled RBNZ would resort to a less-hawkish stance on the policy rates.
Soaring US-China tensions could fetch the risk-off impulse as death threats to US House Speaker Nancy Pelosi is not a weak concern. This may bring sanctions to China by the US and a slowdown in China could also impact the antipodean, being a trading partner to China.
Meanwhile, the US dollar index (DXY) is auctioning in a restricted territory as investors are awaiting the release of the US Nonfarm Payrolls (NFP). A preliminary estimate for the employment generation is 250k, lower than the prior release of 372k. Also, the jobless rate is expected to remain unchanged at 3.6%.
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.