NZD/USD – New Zealand Dollar Dips as US Employment Report Shines

NZD/USD has posted slight losses on Wednesday, as the pair trades at 0.6640 in the North American session. In economic news, the ADP Nonfarm Payrolls easily beat expectations, posting a gain of 217 thousand. There are no New Zealand releases on Wednesday. We could see stronger movement from the pair on Thursday, as the US releases Unemployment Claims and the ISM Non-Manufacturing PMI. As well, Federal Reserve head Janet Yellen will testify before the Joint Economic Committee in Washington.

The New Zealand dollar is trading close to four-week highs against the greenback, buoyed by solid data out of New Zealand. The week kicked off with an excellent reading from ANZ Business Confidence, which jumped to 10.6 points. This marked a six-month high and points to strong business confidence in the economy. This was followed by the GDT Price Index, which broke a nasty streak of three straight declines, posting a gain of 3.6%.

In the US, this week’s employment numbers kicked off in style, with a strong surge from ADP Nonfarm Payrolls. The key indicator climbed to 217 thousand, easily beating the estimate of 191 thousand. This marked a sharp rebound from the previous release of 182 thousand. On Thursday, we’ll get a look at Unemployment Claims, followed by the official NFP on Friday. With the markets abuzz over continuing speculation about a rate hike later in the month, these employment releases will be under the market microscope and could result in volatility on the currency markets.

US manufacturing data has been anything but impressive in recent readings, and this was underlined by a soft reading from ISM Manufacturing PMI on Tuesday. The key index slipped to 48.6 points in November. This figure fell short of the estimate of 50.6 points, and marked the first contraction of the index since May 2013. Manufacturing data in October was also soft – the Empire State Manufacturing Index posted a dismal reading of -10.7 points, worse than the estimate of -5.3 points. This marked a fourth straight decline by the important indicator. As well, Philly Fed Manufacturing Index posted a weak gain of 1.9 points. This negative trend points to trouble in the manufacturing sector and could weigh on the US dollar.

NZD/USD Fundamentals

Wednesday (Dec. 2)

• 1:00 US FOMC Member Lael Brainard Speaks
• 13:10 US FOMC Member Dennis Lockhart Speaks
• 13:15 ADP Nonfarm Employment Change. Estimate 191K. Actual 217K
• 13:30 US Fed Chair Janet Yellen Speaks
• 13:30 US Revised Nonfarm Productivity. Estimate 2.2%. Actual 2.2%
• 13:30 US Revised Unit Labor Costs. Estimate 1.1%. Actual 1.8%
• 15:30 US Crude Oil Inventories. Estimate -0.6M
• 17:25 US Fed Chair Janet Yellen Speaks
• 19:00 US Beige Book
• 20:40 US FOMC Member John Williams Speaks

Upcoming Key Events

Thursday (Dec. 3)

• 13:30 US Unemployment Claims. Estimate 269K
• 15:00 Fed Chair Janet Yellen Testifies
• 15:00 ISM Non-Manufacturing PMI. Estimate 58.1 points

*Key releases are highlighted in bold

*All release times are GMT

NZD/USD for Wednesday, December 2, 2015

NZD/USD December 2 at 16:00 GMT

NZD/USD 0.6638 H: 0.6680 L: 0.6636

NZD/USD Technical

• NZD/USD was flat in the Asian session. The pair posted slight losses in the European session and is steady in North American trade.
• 0.6738 has strengthened in resistance as the pair has posted slight losses.
• 0.6605 is a weak support line.
• Current range: 0.6605 to 0.6738

Further levels in both directions:

• Below: 0.6605, 0.6449, 0.6368 and 0.6233
• Above: 0.6738, 0.6897 and 0.70

OANDA’s Open Positions Ratio

NZD/USD ratio is showing slight movement towards short positions, which now have a slender majority of positions (52%). This is indicative of very slight trader bias towards the pair continuing to lose ground.

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 that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.