NZD/USD – Kiwi Down Slightly, US Jobless Claims Beats Estimate

NZD/USD has posted slight losses on Thursday, reversing the gains which marked the Wednesday session. In the North American session, the pair is trading slightly below the 0.68 line. On the release front, US Unemployment Claims dropped to 267 thousand, below the estimate. Later in the day, Fed chair Janet Yellen will deliver remarks in New York City. There are no New Zealand releases on the schedule.

The US labor market continues to look strong, as Unemployment Claims dipped to 267 thousand, below the estimate of 271 thousand. Last week’s job numbers, were solid as well. Nonfarm Payrolls, the most important employment indicator, came in at 215 thousand in March, above the forecast of 206 thousand. Weekly unemployment rolls have remained below the 300,000 level for 57 weeks, the longest streak since 1973. A steady rise in hiring has translated into stronger consumer spending and a shot in arm for the US economy.

The Federal Reserve released the minutes of its March policy meeting on Wednesday. The minutes indicated that the Fed is unlikely to raise rates before June at the earliest. Although some policymakers expressed approval for a rate hike in April, others expressed concern about the risks to the US economy posed by global economic conditions. There was a split amongst members as to whether the recent pickup in inflation was sustainable. Many Fed members were worried about the lack of options available to the Fed since rates remain close to zero. This concern can have significant impact on the currency markets, since the dollar could strengthen if the Fed is unable to implement effective easing measures. The minutes appear to be a validation of Janet Yellen’s remarks last week, which were very dovish and dampened growing enthusiasm about a rate hike as early as April. Bottom line? There is a strong likelihood that the Fed will raise rates twice in 2016, but the timetable of any moves is unclear. Yellen speaks later on Thursday in New York, and the markets will be carefully monitoring her comments, looking for clues as to the Fed’s rate plans.

NZD/USD Fundamentals

Thursday (April 7)

• 8:30 US Unemployment Claims. Estimate 271K. Actual 267K
• 10:30 US Natural Gas Storage. Estimate 7B. Actual 12B
• 15:00 US Consumer Credit. Estimate 15.0B
• 17:30 US Fed Chair Janet Yellen Speaks
• 16:15 FOMC Member Esther George Speaks

*Key releases are highlighted in bold

*All release times are DST

NZD/USD for Thursday, April 7, 2016

NZD/USD April 7 at 10:45 DST

Open: 0.6828 Low: 0.6772 High: 0.6862 Close: 0.6780

NZD/USD Technical

• NZD/USD was flat in the Asian session. The pair posted losses in the European session and this trend has continued in North American trade
• There is strong resistance in 0.6897
• 0.6738 is providing support

Further levels in both directions:

• Below: 0.6738, 0.6605 and 0.6449
• Above: 0.6897, 0.7011, 0.7100 and 0.7231
• Current Range: 0.6738 to 0.6897

OANDA’s Open Positions Ratio

The NZD/USD ratio is showing gains in long positions on Thursday, continuing the trend which marked the ratio in the Wednesday session. Long positions have a strong majority (64%), which is indicative of trader bias towards NZD/USD breaking and moving to higher 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.