NZD/USD bulls pushed back into the close ahead of NFP

NZD/USD has started to bleed out although remains 0.45% higher on the day.  The US dollar was lower vs. most major currencies on Thursday, down some 0.5% at the time of writing as per the DXY to 105.81. The positive impact of hawkish Federal Reserve comments faded this week while investors waited for more signs on the data front. Friday's Nonfarm Payrolls and next week's inflation data will be critical. 

''The Kiwi is back above 0.63 this morning, having capitalised on the downward correction of the USD DXY on the back of lower interest rates. What this has meant is that the NZD has held fairly steady on key crosses like NZD/AUD (although for various other reasons, we have seen volatility on some other crosses, as below),'' analysts at ANZ Bank explained.

''There is no local data today, but the US gets monthly jobs data, and that’s the next key risk event (at 12.30am tonight). Markets aren’t expecting a big jobs print, or a change in the unemployment rate, or the monthly pace of wage growth, and in that regard, the hurdle to an upside surprise seems low. The fall in US bond yields does seem out of character with the tone of Fedspeak, but of course markets remain fearful of a US recession, so it’s all a bit mixed.''

Looking ahead, the Nonfarm Payrolls data likely continued to advance firmly in July but at a more moderate pace after four consecutive job gains at just below 400k in March-June, according to analysts at TD Securities. ''High-frequency data, including Homebase, still point to above-trend job creation. We also look for the UE rate to stay at 3.6% for a fifth straight month, and for wage growth to remain steady at 0.3% m/m (4.9% YoY).''