New Zealand Dollar strengthens as weaker US labor market weighs on US Dollar

The New Zealand Dollar gains against the US Dollar and keeps NZD/USD above the 0.5700 mark.
China's services sector remains resilient despite a slight slowdown in June, supporting China-linked currencies.
Softer-than-expected US employment data reduces expectations of Federal Reserve tightening.

Ghiles Guezout FXStreet

NZD/USD trades around 0.5710 at the time of writing on Friday, up 0.21% on the day, supported by improved risk sentiment and a weaker US Dollar (USD) following a softer-than-expected US employment report. US financial markets remain closed on Friday in observance of Independence Day, which could keep trading volumes subdued.

The New Zealand Dollar (NZD) also draws support from the latest economic data released in China. The RatingDog Services Purchasing Managers Index (PMI) eased slightly to 54.1 in June from 54.4 in May but continued to point to robust expansion in the services sector, providing additional support to the Kiwi given New Zealand's close trade ties with China.

On the monetary policy front, ASB Bank has dropped its call for a July interest rate hike by the Reserve Bank of New Zealand (RBNZ). The bank now expects the central bank to leave its Official Cash Rate unchanged this month before resuming a gradual tightening cycle from September, with 25-basis-point increases taking the policy rate to 3.25% by early 2027.

The main driver behind NZD/USD strength, however, remains the weakness of the US Dollar. Data released on Thursday showed that the United States (US) economy added just 57K Nonfarm Payrolls (NFP) in June, well below market expectations of 110K. The weaker labor market report prompted investors to scale back expectations for further interest rate hikes by the Federal Reserve (Fed).

According to the CME FedWatch tool, the chance of a September rate hike has fallen to around 53%, down from nearly 63% before the employment report. This reassessment of the monetary policy outlook continues to weigh on the Greenback while supporting risk-sensitive currencies, including the New Zealand Dollar.

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 Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.09%	-0.08%	0.10%	0.10%	-0.15%	-0.20%	-0.03%
EUR	0.09%		0.02%	0.17%	0.19%	-0.10%	-0.11%	0.05%
GBP	0.08%	-0.02%		0.13%	0.17%	-0.13%	-0.13%	0.04%
JPY	-0.10%	-0.17%	-0.13%		0.02%	-0.28%	-0.31%	-0.12%
CAD	-0.10%	-0.19%	-0.17%	-0.02%		-0.31%	-0.32%	-0.13%
AUD	0.15%	0.10%	0.13%	0.28%	0.31%		-0.01%	0.17%
NZD	0.20%	0.11%	0.13%	0.31%	0.32%	0.00%		0.18%
CHF	0.03%	-0.05%	-0.04%	0.12%	0.13%	-0.17%	-0.18%

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

FXStreet

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.

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