NZD/USD consolidates its gains around 0.5900, eyes on the US NFP data
|- NZD/USD oscillates in a narrow trading range around 0.5900.
- New Zealand's Unemployment Rate suggests that employment is now approaching its maximum sustainable level.
- Market players are confident that the Federal Reserve (Fed) is already done with the tightening cycle.
- The US Nonfarm Payrolls will be in the spotlight on Friday.
The NZD/USD pair consolidates gains during the early Asian trading hours on Friday. A falling US Treasury bond yield and a weaker US Dollar lift the pair to nearly the 0.5900 mark, bouncing off the low of 0.5875. However, market players prefer to wait on the sidelines ahead of the highly-anticipated US Nonfarm Payrolls (NFP) on Friday. At press time, the pair is down 0.06% on the day to trade at 0.5895.
On Wednesday, the New Zealand Unemployment Rate for the third quarter rose from 3.6% to 3.9%. The figures suggest that employment is now approaching its maximum sustainable level. Markets expect a 10% probability of an additional rate hike at the RBNZ's policy meeting in late November; however, the chance of a rate cut might be around August of the following year.
On the USD’s front, The US weekly Initial Jobless Claims came in better than expected climbing to 217K from the previous reading of 212K. The Unit Labor Cost for the third quarter (Q3) fell by 0.8% from a 2.2% rise in the previous reading, worse than the expectation. Finally, the Factory Orders came in at 2.8% MoM in September, above the market consensus.
The upbeat US economic data failed to boost the US Dollar (USD) as market players are confident that the Federal Reserve (Fed) is already done with the tightening cycle. The odds of a rate hike in the December meeting are lower than 20%, according to the CME FedWatch Tool. This, in turn, exerts some pressure on the USD.
Moving on, traders will take more cues from the upcoming data. On Friday, the US employment data will be released. The US Nonfarm Payrolls (NFP) are expected to increase 180K jobs in October. While unemployment rate is expected to remain steady at 3.8%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.