The New Zealand dollar has soared today. In the European session, NZD/USD is trading at 0.6018, up an impressive 1.1% at the time of writing.
New Zealand job growth surprises on the upside
New Zealand’s labour market has been cooling off due to elevated interest rates and the markets were braced for a soft jobs report for the second quarter. Instead, job growth rebounded and unemployment was lower than expected, sending the New Zealand dollar sharply higher.
Job growth expanded by 0.4% in the second quarter, up from -0.2% in Q1 and above the market estimate of -0.2%. The unemployment rate rose from 4.4% to 4.6%, a notch under the market estimate of 4.7%. This is the highest level since Q1 of 2021 but investors were pleased that it was lower than expected.
The positive employment report has reduced market expectations of a rate cut from the Reserve Bank of New Zealand, which has driven the New Zealand dollar sharply higher today. Inflation has fallen to 3.3%, its lowest level in three years and close to the upper level of the central bank’s target range between 1% and 3%. A weak employment report could have cemented a rate cut at next week’s meeting but the job data was better than expected, which will complicate the rate decision.
The final tier-1 release before the August 14 meeting is Inflation Expectations on Thursday. This indicator is closely followed by the central bank and will be a factor in the rate decision. Inflation Expectations has been on a steady downtrend and is expected to ease to 2.33% in the second quarter, compared to 2.5% in the first quarter.
NZD/USD technical
-
NZD/USD is testing resistance at 0.6009. Above, there is resistance at 0.6061.
-
There is support at 0.5934 and 0.5882.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0900 as risk mood improves
EUR/USD continues to move sideways above 1.0900 in the second half of the day on Wednesday. In the absence of high-tier data releases, the positive shift seen in risk sentiment, as reflected by strong gains in Wall Street's main indexes, helps the pair hold its ground.
USD/JPY holds near 147.00 after BoJ's Uchida-led volatility
USD/JPY remains strongly bid near 147.00 after testing 148.00 early Wednesday. Traders digest the dovish comments from the BoJ official Uchida, helping the Japanese Yen recover some ground, despite the upbeat mood. The Fed- BoJ policy divergence stays in the spotlight.
Gold stabilized just ahead of $2,400
Gold stages a rebound and looks to stabilize at around $2,400 after closing the first two days of the week deep in negative territory. Rising US Treasury bond yields seem to be limiting XAU/USD's upside ahead of the 10-year US Treasury note auction.
Crypto Today: Morgan Stanley to offer Bitcoin to clients, Ethereum gears for $3,000, XRP steady above $0.50
Morgan Stanley advisors are ready to offer Bitcoin Spot ETF to their clients starting Wednesday, August 7. Bitcoin makes a comeback above $57,000, Ether gears for recovery to $3,000 and XRP gains ground above support at $0.50.
JPY weaker, VIX falling, stocks rebound, what's next?
The Dollar is currently starting to appreciate again against most other currencies. In light of the negative headlines from the economic sight the Greenback might weaken again, though.