NZD/USD extends declines below 0.64 on downbeat NZ Q3 Employment data

  • NZD/USD stretches two-day-old downpour as jobs report keep RBNZ’s November rate cut on cards.
  • Trade-related optimism likely to fade amid mixed reports, calls for the Fed to stop further rate cuts gain focus.

With the weaker than expected employment data keeping another rate cut from the Reserve Bank of New Zealand (RBNZ) on cards, NZD/USD drops to 0.6378, after flashing intra-day low of 0.6371, during early Asian morning on Wednesday.

The third quarter (Q3) employment report from the Statistics New Zealand portrays increase in headline Unemployment Rate to 4.2% from 4.1% forecast and 3.9% prior. Employment Change was marked lower than 0.3% expected to 0.2% while Participation Rate rose beyond 70.3 mark to match 70.4 prior while Labour Cost Index (QoQ) came in at expectations of 0.6% versus 0.8% prior.

Despite the recently hawkish statements from the RBNZ policymakers, traders keep expecting another rate cut in November. “Market pricing for RBNZ is for 13bp of easing on 13 November, with a terminal rate of 0.72%,” says Westpac.

The kiwi pair’s reversal from 100-day SMA gained additional weight on Tuesday as the US dollar (USD) registered heavy gains initially based on optimism surrounding the US-China trade deal and then cheering upbeat activity data at home.

It’s worth noting that the latest figures for (Global Dairy Trade) GDT Price Index concerning the second half of October crossed 1.9% forecast and 0.5% prior with 3.7% gains. Prices of Whole Milk Powder (WMP) were also up 3.6% to $3,254 per metric tone. Prices of milk are the key to New Zealand economy.

Investors will now focus on the trade headlines amid a lack of major data/events prior to the comments from the US Federal Reserve (Fed) policymakers during the later part of the day.

Technical Analysis

Unless breaking a 100-day Simple Moving Average (SMA) level of 0.6462 buyers are less likely to head towards August month high and 200-day SMA near 0.6590. As a result, odds for the pair’s pullback to 21-day SMA level of 0.6358 ahead of highlighting 0.6330 and 0.6300 rest-points are high.

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD extends losses toward 1.1250 amid coronavirus concerns

EUR/USD is trading closer to 1.1250 as concerns about US coronavirus cases are growing. Eurozone finance ministers are meeting ahead of next week's summit.  US PPI and updated COVID-19 statistics are awaited.


GBP/USD pressured under 1.26 amid risk-off mood, Brexit uncertainty

GBP/USD is trading below 1.26, off the highs. Rising US coronavirus cases are pushing markets lower and the safe-haven dollar higher. Concerns about Brexit and the UK refusal to participate in the EU coronavirus vaccine scheme are weighing on sterling. 


Gold: Well-defined battle lines point to range play around $1800

Gold nurses losses around the $1800 following Thursday’s good two-way businesses. The risk-off theme amid COVID-19 concerns continues to bode well for the US dollar. 

Gold News

Canada Net Change in Employment June Preview: June is looking better and better

Job gains expected to more than double in June. Unemployment rate to drop to 12% from 13.7 in May. Ivey PMI was twice its forecast in June, highest since Nov 2019. USD/CAD would benefit from better June job figures.

Read more

WTI extends Thursday’s drop as virus cases rise

Oil extends overnight sell-off as virus concerns dominate the market sentiment. The resurgence of virus cases in the US has fueled lockdown fears. The US on Thursday registered 65,551 new cases, a record for a 24-hour period.

Oil News