Kiwi drops following disappointing employment figures
Thursday 2 May, 2019
Daily Currency UpdateNZD - New Zealand DollarThe New Zealand dollar was dragged lower on Wednesday morning following a poor employment figure for the first quarter of 2019. Opening the morning at 0.6670, the Kiwi saw downside movements to an intraday low of 0.6625. The main data release saw the number of jobs drop by 0.2% following the expectations of a 0.5% increase. Seasonally adjusted unemployment rates dropped to 4.2%, down from 4.3% in line with expectations.With a slowdown in growth expectations and subdued jobs data, there is now a 65% chance that the RBNZ next move will be a rate cut at next weeks monetary policy meeting in line with their change to a dovish stance.From a technical perspective, the Kiwi currently trading at 0.6620. We continue to expect support to hold on moves approaching 0.6580 while now any upward push will likely meet resistance at 0.6700.
Key MoversThe Greenback was the key mover overnight, bolstered by a strong ADP employment report as 275,000 jobs were added to the private sector. The DXY rebounded overnight from Wednesday lows of 97.15 to see an overnight high of 97.73. The main price action occurred following the release of the latest FOMC rate statement leaving rates on hold at the target range of 2.25-2.5%. Fed Reserve chairman Jerome Powell was positive in his sentiment noting strong labour conditions and inflation near their target of 2%.The Great British Pound was one of the few currencies that moved relatively higher over the past 24 hours following a 2.5% decline in April against the greenback. Gains were seen to highs of 1.3100 initially against the dollar pre-FOMC decision and was stronger against the Euro as Brexit talks have taken a breather in the lead up to this evenings Bank of England interest rate decision.Markets have been pricing a more bullish stance from the central bank despite the likelihood that tonight they will hold interest rates at 0.75%. Markets currently pricing a 40% chance of one interest rate hike by year end.
- NZD/USD: 0.6580 - 0.6700 ▼
- NZD/EUR: 0.5880 - 0.5960 ▼
- NZD/AUD: 0.9400 - 0.9500 ▼
- GBP/NZD: 1.9500 - 2.0000 ▲
- NZD/CAD: 0.8850 - 0.8950 ▼