NZD marks new 2025 high as all eyes shift to US payroll data

Key Movers

There was plenty to digest overnight with the USD marking fresh multi-year lows and the euro testing new highs. The ECB cuts its policy rate by 25 basis points in a widely anticipated move, however it caught investors off guard in the moments following the meeting when ECB president Christine Lagarde said “I think we are getting to the end of a monetary cycle”. The comments were followed by a Bloomberg report that suggested ECB officials expect to pause the easing cycle next month. The suggestion that any further rate cuts will be few and far between prompted European rates to rally and helped drive the euro toward 1.15. Softer US jobless claims helped the single currency consolidate its position as US treasury yields fell and the US dollar DXY index touched its lowest level in more than two years, before reports of easing tensions between the US and China helped arrest the dollars decline. A 90-minute phone call between President Trump and Premier Xi appears to have renewed faith in the US/China détente and alleviated growing tensions. The USD found support through the back end of the session, forcing the euro back below 1.1440. In other news, the GBP tested a break above 1.36, while the yen pushed the dollar below 142.50, before closing lower in the day.

Our attentions turn now to US non-farm payrolls as a crucial marker guiding direction into the weekly close.