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NZD extends recovery through 0.71 as attentions shift to US payroll print

Friday 3 September, 2021

Daily Currency Update

NZD - New Zealand Dollar

In what has become a familiar tagline through the last fortnight the NZD outperformed through trade on Thursday, extending its recovery off mid-August lows beyond 0.71 US cents. Price action across financial markets was largely muted as investors chose to sideline larger bets in the lead up to tonight’s all important non-farm payroll and labour market print. However, expectations for employment growth have faltered this week amid a softening across leading indicators prompting analysts to front expectations and drive the USD lower. Having touched intraday highs at 0.7115, the NZD held gains through the overnight session and opens marginally short of two and half month highs at 0.7111. Near term direction and an extension beyond resistance at the current handle depends entirely on tonight’s payroll print. A softening in US labour market performance all but guarantees the Fed will delay any announcement on tapering into November, opening the door for the Kiwi to push back toward year-to-date highs at 0.7315.

Key Movers

Price action across markets was largely subdued through Thursday as investors wait on US payroll data. The US dollar has come under mounting pressure this week as leading indicators point to a further softening in labour market performance. A slow down in employment growth in July may be extended through August as the complications and challenges posed by the delta variant delay the broader US economic recovery. Tonight’s print is crucial in determining near term direction. The Fed has signaled a move to taper QE will not be brought forward unless the labour market shows significant moves to full employment. With estimates falling between 400K-725K, a miss to the low side will spur an extended rally across risk assets as the promise of accommodative monetary policy continues.

Expected Ranges

  • NZD/USD: 0.6950 - 0.7180 ▲
  • NZD/EUR: 0.5920 - 0.6030 ▲
  • GBP/NZD: 1.9280 - 1.9580 ▼
  • NZD/AUD: 0.9550 - 0.9650 ▲
  • NZD/CAD: 0.8890 - 0.8990 ▲