- NZD/USD stumbles below 0.6100 on risk aversion after positive US data.
- The Fed’s rating of a 75 basis point increase rose to 91%, as shown by STIRs on money market futures.
- New Zealand Trade Data and US Nonfarm Payrolls Report. To the eyes.
NZD/USD slips to multi-week lows around 0.6060 on Thursday as the New York session draws to a close, after US data paints a picture of solid factory activity as the labor market continues to be tight robust, keeping Fed policymakers “hopeful” of achieving a soft landing, despite the tightening conditions.
NZD/USD is trading below its opening price after hitting a daily high of 0.6122. Still, it fell below the 0.6100 figure on a sour shift in sentiment, boosted by a weaker-than-expected Caixin manufacturing PMI in China, dropping into “recessive” territory. At the time of writing, NZD/USD is trading at 0.6075.
Wall Street ended Thursday’s session paring its losses, with a late jump in US stocks. Meanwhile, expectations of a 75 basis point tightening from the US Federal Reserve at the September monetary policy meeting have risen, with a 92% probability, after strong jobs and inflation data. ‘ISM in the United States.
The US Department of Labor reported that initial weekly jobless claims for the past week, which ended August 27, had fallen. Later, the Institute for Supply Management (ISM) revealed that the August manufacturing PMI was unchanged at 52.3, better than expected.
Elsewhere, the US Dollar Index, a gauge of the dollar’s value, hit a 20-year high of 109.997 during the day, although at press time it was up 0.91 %, at 109.675.
The aforementioned factors were a headwind for NZD/USD, which relied on greenback momentum and market sentiment due to the lack of New Zealand economic data. It should be noted that the major tested the year-to-date low reached on July 14, but buyers stepped in and recovered some ground.
What to watch
The New Zealand Economic Calendar will show terms of trade and export volumes, as well as import/export prices. On the US front, the dossier will reveal the US Nonfarm Payrolls report, as well as the unemployment rate and factory orders.