|

New Zealand Dollar advances as weaker US employment data weighs on US Dollar

  • NZD/USD advances after a weaker-than-expected US employment report.
  • US job creation slows sharply in June, reinforcing expectations of Fed policy hold.
  • BNY notes that the RBNZ will maintain a six-member MPC ahead of its July 8 meeting.

NZD/USD rises 0.59% on Thursday to trade around 0.5705 at the time of writing, supported by a sharp decline in the US Dollar (USD) following the release of a significantly weaker-than-expected US employment report.

Data released by the Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) increased by only 57K in June, well below the market consensus of 110K. May's reading was revised down to 129K from 172K previously, while April's figure was also revised lower to 148K from 179K, resulting in a combined downward revision of 74K jobs. Meanwhile, the Unemployment Rate unexpectedly declined to 4.2% from 4.3%, while the Labor Force Participation Rate fell to 61.5% from 61.8%. Annual wage growth, as measured by Average Hourly Earnings, accelerated slightly to 3.5%, in line with expectations.

Markets are nevertheless focusing on the weak headline payroll figure, reinforcing expectations that the Federal Reserve (Fed) could adopt a less hawkish monetary policy over the coming months. This outlook weighs on the US Dollar and supports rival currencies, including the New Zealand Dollar (NZD).

On the New Zealand side, domestic developments are also providing support to the currency. According to BNY, the Reserve Bank of New Zealand (RBNZ) will maintain a six-member Monetary Policy Committee (MPC) until the November election, following a split 3-3 vote at its May meeting. The bank also noted that May building consent data showed a monthly decline in new approvals but a 19% increase on an annual basis, highlighting that residential activity remains resilient ahead of the July 8 monetary policy decision.

New Zealand Dollar Price Today

The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.56%-0.60%-1.01%-0.23%-0.50%-0.57%-0.89%
EUR0.56%-0.04%-0.46%0.32%0.05%0.03%-0.32%
GBP0.60%0.04%-0.41%0.34%0.10%0.06%-0.28%
JPY1.01%0.46%0.41%0.76%0.51%0.42%0.12%
CAD0.23%-0.32%-0.34%-0.76%-0.26%-0.31%-0.66%
AUD0.50%-0.05%-0.10%-0.51%0.26%-0.04%-0.39%
NZD0.57%-0.03%-0.06%-0.42%0.31%0.04%-0.33%
CHF0.89%0.32%0.28%-0.12%0.66%0.39%0.33%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

More from Ghiles Guezout
Share:

Editor's Picks

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold eyes $4,400 as receding Fed hike bets undermine USD

Gold is looking to build on Friday's bounce from the $4,300 neighborhood as reduced bets for an immediate Fed rate hike keep US Dollar bulls on the defensive and support the non-yielding bullion. However, the US-Iran standoff could limit deeper USD losses, warranting caution before positioning for the resumption of the XAU/USD pair's recent uptrend to its highest level since June 5.

Week ahead: Summer lull could be tested by geopolitics and central bank expectations
It has been a relatively monotonous week, with the US dollar desperately trying to recover from last Friday’s nonfarm payrolls-induced losses, the main equity indices trading mostly sideways amidst a quiet earnings calendar, and sovereign bond yields reminding everyone of their pivotal role in the current financial system. These market moves are partly connected to the Middle East developments.
 Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.