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NZD/USD stabilises as New Zealand labour market concerns grow, Fed rate cuts eyed

  • NZD/USD stabilises around 0.5660, pausing after three consecutive days of gains.
  • Weakening labour conditions in New Zealand reinforce expectations of further monetary easing.
  • The US Dollar remains under pressure while markets lower their bets on Federal Reserve rate cuts.

NZD/USD trades around 0.5660 on Thursday at the time of writing, virtually unchanged on the day, after failing to extend its three-day winning streak. The pair edges lower, weighed down by the softness of the New Zealand Dollar (NZD) amid rising concerns about the country’s labour market. Investors are strengthening their expectations of additional easing by the Reserve Bank of New Zealand (RBNZ) as the economic backdrop appears increasingly fragile.

Last week, Stats NZ confirmed a marked deterioration in labour conditions. The Unemployment Rate held at 5.3% in the third quarter, its highest level in nine years, while job creation stalled. This environment reinforces the prospect of a rate cut in December, with markets now pricing a high chance of a 25-basis-point reduction, and even a marginal risk of a deeper 50-basis-point move. Meanwhile, inflation expectations for the fourth quarter remained stable at 2.8%, leaving room for a more accommodative policy stance.

In the United States (US), the US Dollar (USD) remains under pressure despite the official end of the government shutdown, after President Donald Trump signed the funding bill. The removal of political uncertainty has not been enough to lift the Greenback, as markets now await the wave of economic data delayed during the 43-day closure. Investors continue to expect another cut by the Federal Reserve (Fed) before year-end, but the odds of a December move have eased to 52.7% on Thursday, compared to 63% on the previous day and 95% a month ago.

Several Fed officials have called for caution. Raphael Bostic, President of the Atlanta Fed, warned that easing too soon could “feed the inflation beast,” while Susan Collins, President of the Boston Fed, argued that downside risks in the labour market have not increased meaningfully. Still, recent private-sector data point to a gradual softening, as the ADP report shows average weekly job losses of 11,250 in late October, and Challenger reported 153,074 job cuts in October, well above September’s 54,064 job cuts.

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 Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD-0.17%-0.18%-0.02%-0.03%-0.32%-0.01%-0.27%
EUR0.17%-0.00%0.16%0.16%-0.13%0.18%-0.09%
GBP0.18%0.00%0.16%0.16%-0.13%0.18%-0.08%
JPY0.02%-0.16%-0.16%-0.03%-0.31%-0.03%-0.26%
CAD0.03%-0.16%-0.16%0.03%-0.28%0.01%-0.24%
AUD0.32%0.13%0.13%0.31%0.28%0.31%0.06%
NZD0.00%-0.18%-0.18%0.03%-0.01%-0.31%-0.27%
CHF0.27%0.09%0.08%0.26%0.24%-0.06%0.27%

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

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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