- NZD/USD has failed to defend its intraday low after a modest pullback.
- Fed policymaker has painted a hawkish picture for the rest of the year.
- Kiwi’s downbeat employment data could backfire later.
The NZD/USD has slipped back to its intraday low at around 0.6286 after a mild pullback. The US dollar index (DXY) is advancing higher right from the opening tick. On a broader note, the asset corrected to near 0.6280 after facing barricades above 0.6310 in the late New York session. A less confident rally above 0.6310 as an attempt to surpass the two-day high has bolstered the odds of further correction ahead.
The DXY is gaining strength as the Federal Reserve (Fed) policymaker has painted a hawkish picture ahead. Cleveland Fed President Loretta J. Mester, on Thursday, cited that the policy tightening measures should not be halted by the Fed without recording downward signs in the inflation rate for months. The Fed should raise interest rates to above 4% in order to bring inflation back down to 2% target. Therefore, the interest should see the continuation of elevation this year and for the next half year.
In today’s session, the release of the US Nonfarm Payrolls (NFP) will be of utmost importance. A report from JP Morgan on US labor market data indicates that the US economy has created 200k jobs in the month of July. No doubt the labor market has remained extremely tight in the US and now there is less room for further job creation.
On the kiwi front, Stats NZ reported that the Unemployment Rate increased to 3.3% from the estimates of 3.1% and the prior release of 3.2% in the second quarter. Also, the Employment Change for the second quarter has landed at 0%, significantly lower than the estimates of 0.4% and the prior print of 0.1%.
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