NZD pushes off new lows as attentions turn to US labour data
Friday 10 March, 2023
Daily Currency UpdateThe New Zealand dollar opens Friday in much the same position as it started trade on Thursday, unable to consolidate gains won on the heels of softer US labour market data. Having tracked sideways through the local session the NZD climbed steadily overnight, breaking back above US$0.6130 to touch intraday highs just short of US$0.6150. Weaker than anticipated US labour market data prompted a correction in 2-and-10-year treasury yields and fostered a US dollar downturn, driving the NZD upward before selling pressures took over. With momentum firmly behind the dollar, markets appear wary in extending NZD gains ahead of tonight’s all-important US non-farm payroll print. Another robust read will amplify calls for the Fed to accelerate the pace of rate hikes and firm expectations the Fed will lift rates by 50 basis points later this month. As the NZD clings to supports at US$0.61 another blockbuster US print could see the NZD extend its recent downturn toward US$0.60.
Key MoversThe US dollar faced downward pressure through trade on Thursday following weaker than anticipated US labour market data. US initial jobless claims jumped, surpassing expectations and touching their highest level this year. While poor weather likely elevated numbers, continuous claims climbed to 15-month highs suggesting some of the heat may finally be leaving the labour market. Hopes a downturn in labour market activity will ease pressure on wages and inflation prompted a correction in 2-and-10-year yields. With US rates moving lower the yen advanced forcing the dollar back toward 136.25, while the euro climbed back through 1.0550 and toward 1.06, and the GBP jumped back above 1.19, outperforming all other major counterparts. Attentions turn now to US non-farm payrolls. Any notable move off market expectations will likely prompt big swings in bonds, equities and currencies as markets re-shape expectations for near term Fed policy. We anticipate the US will have added 225,000 new jobs with unemployment steady at 3.4% and earning data stable at 0.3%.
- NZD/USD: 0.6020 - 0.6250 ▼
- NZD/EUR: 0.5720 - 0.5820 ▼
- GBP/NZD: 1.9220 - 1.9720 ▲
- NZD/AUD: 0.9250 - 0.9320 ▼
- NZD/CAD: 0.8380 - 0.8520 ▲