As the US dollar climbs to new highs, the NZD/USD is once again under pressure.
All eyes will now be on the NFP event on Friday, while the NZD is expected to recover.
The New Zealand dollar is currently trading at 0.6984, down a smidgeon on the day after having its wings clipped once more by US dollar strength. The bird fell from a high of 0.7706 to a low of 0.6965, as the greenback soared to a new cycle high of 92.448, as measured by the DXY.
“The Kiwi is a little weaker this morning after a reasonably calm day that saw the USD DXY advance following a stronger-than-expected ADP employment print, which is a bullish predictor of US payroll data due Friday night (NZT),” ANZ Bank analysts said.
According to the ADP National Employment Report, private payrolls climbed by 692,000 jobs last month.
In addition, figures for May was revised lower, showing 886,000 new jobs rather than the previously stated 978,000. Private payrolls were expected to grow by 600,000 jobs, according to economists polled by Reuters.
“Month and quarter-end rebalancing provided some volatility, but NZD and AUD were more steady than the majors, resulting in NZD outperformance on those crosses,” the analysts added.
“Price behavior remains odd (at least in our opinion), with the NZD unable to profit from decreasing US bond rates, raising expectations for earlier OCR hikes in New Zealand, and the ongoing rally in commodity prices.” We believe it provides a favorable backdrop for the NZD, but it has been an unusual week, so patience may be required,” the analysts added./n
