NZD/USD clings to upbeat jobs data-inspired gains to over two-week high, around 0.6000
- NZD/USD catches aggressive bids in reaction to the upbeat employment details.
- The momentum gets an additional boost after the release of Chinese trade data.
- A positive risk tone also benefits the Kiwi, though a stronger USD might cap gains.
The NZD/USD pair builds on its strong intraday gains and climbs to over a two-week high heading into the European session on Wednesday, with bulls now building on the momentum beyond the 0.6000 psychological mark.
The New Zealand Dollar (NZD) rallied hard following the release of better-than-expected employment details, showing that the number of employed people increased by 0.4% in the second quarter. The reading was better than the 0.2% decline registered in the previous quarter and market expectations. Adding to this, the unemployment rate rose less than consensus estimates, to 4.6% from 4.4% during the January-March quarter. The upbeat data lowered the likelihood of a rate cut by the Reserve Bank of New Zealand (RBNZ) and prompted aggressive short-covering around the NZD/USD pair.
Meanwhile, Chinese trade data released this Wednesday showed an unexpected surge in imports, by the 7.2% YoY rate in July, which suggested that domestic demand remains resilient. This, along with a generally positive risk tone, pushes the NZD/USD pair higher for the second successive day. It, however, remains to be seen if bulls can capitalize on the move amid a goodish pickup in the US Dollar (USD) demand, bolstered by a further recovery in the US Treasury bond yields. Moreover, geopolitical risks could cap the optimism in the markets and act as a headwind for the NZD/USD pair.
Moving ahead, there isn't any relevant market-moving economic data due for release from the US on Wednesday. Hence, the US bond yield will play a key role in influencing the USD price dynamics. Apart from this, the broader risk sentiment might contribute to providing some impetus to the NZD/USD pair ahead of the New Zealand second quarter inflation expectations data, due for release during the Asian session on Thursday.
Economic Indicator
Employment Change
The Employment Change, released by Statistics New Zealand, is a measure of the change in the number of employed people in New Zealand. Generally speaking, a rise in this indicator has positive implications for consumer spending and is stimulative of economic growth. A higher reading is seen as bullish for the New Zealand Dollar (NZD), while a lower reading is seen as bearish.
Read more.Last release: Tue Aug 06, 2024 22:45
Frequency: Quarterly
Actual: 0.4%
Consensus: -0.2%
Previous: -0.2%
Source: Stats NZ
Statistics New Zealand releases employment data on a quarterly basis. The statistics shed a light on New Zealand’s labor market, including unemployment and employment rates, demand for labor and changes in wages and salaries. These employment indicators tend to have an impact on the country’s inflation and Reserve Bank of New Zealand’s (RBNZ) interest rate decision, eventually affecting the NZD. A better-than-expected print could turn out to be NZD bullish.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
