NZD/USD turns sideways around 0.6200 as investors await US ADP Employment
|- NZD/USD is facing hurdles around 0.6200 as anxiety soars ahead of Fed Powell’s speech.
- Fed’s higher interest rates are responsible for weaker projections for US employment data.
- The reopening of a few manufacturing sites in the Chinese city of Zhengzhou may infuse optimism into risk impulse.
The NZD/USD pair is displaying a sideways auction profile near the round-level hurdle of 0.6200 in the early Asian session. The kiwi asset has turned rangebound after a vertical drop from the 0.6250 hurdle. The major is expected to remain on tenterhooks as investors are awaiting the speech from Federal Reserve (Fed) chair Jerome Powell to get clarity over rate hike deceleration chatters.
Meanwhile, the risk impulse has turned asset-specific as a few risk-sensitive currencies are still solid. The US Dollar index (DXY) is facing barriers in sustaining above the critical hurdle of 106.80. The 10-year US Treasury yields have recovered dramatically above 3.75%. The recovery in the US yields could be linked to a speech from Jerome Powell ahead as it will trim ambiguity over interest rate projections for December monetary policy meeting.
Apart from Fed Powell’s speech, the economic data will be crucial for the market participants in the United States Automatic Data Processing (ADP) Employment data. As per the projections, the US economy has added fresh 200k jobs in the labor market lower than the prior release of 239k. This has been the outcome of accelerating interest rates by the Fed, which has forced firms to postpone their expansion plans to dodge higher interest obligations.
Also, the Gross Domestic Product (GDP) data will be crucial for investors. The annualized GDP for the third quarter is seen unchanged at 2.6%. A decline in the growth rate would cement expectations of a slowdown in inflation.
On the New Zealand front, the Kiwi Dollar is still in the havoc of China’s unrest, being one of the leading trading partners. Public protest against the rollback of Covid-19 lockdown measures by Chinese authorities is expected to make the epidemic situation more vulnerable ahead.
Late Tuesday, the Chinese city of Zhengzhou, home to Apple Inc.’s largest manufacturing site in China, said that it was lifting a lockdown of its main urban areas put in place five days ago as Covid cases climbed. The headline is expected to infuse optimism in the cautious market mood ahead.
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.