NZD/USD – Kiwi Steady on Mixed US Releases

NZD/USD is showing limited movement on Thursday, as the pair trades at 0.6620 in the North American session. In economic news, US Unemployment Claims almost matched the estimate, rising to 268 thousand. ISM Non-Manufacturing PMI slipped to 55.9 points, missing expectations. As well, Federal Reserve Chair Janet Yellen testifies before the Joint Economic Committee.

The New Zealand dollar has enjoyed some recent success against its US counterpart. The kiwi 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, Unemployment Claims came in just a shade below the forecast, rising to 268 thousand, compared to last week’s reading of 260 thousand. The employment event parade concludes on Friday, with the official Nonfarm Payrolls report. The markets are braced for a strong downturn, with an estimate of 201 thousand. 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 PMIs, key gauges of economic activity, have not had a particularly good week. On Tuesday, ISM Manufacturing PMI 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. Recent manufacturing releases were also soft, as the US manufacturing sector continues to struggle. There wasn’t any relief from ISM Non-Manufacturing PMI on Thursday, as the index slipped to 55.9 points, well short of the forecast of 58.1 points. This marked a six-week low for the indicator. The silver lining is that although the index took a hit in November, the reading was still above the 50 line, indicative of expansion.

NZD/USD Fundamentals

Thursday (Dec. 3)

• 12:30 US Challenger Job Cuts. Actual -13.9%
• 13:30 US Unemployment Claims. Estimate 269K. Actual 268K
• 14:45 US Final Services PMI. Estimate 56.5 points. Actual 56.1 points
• 15:00 US Fed Chair Janet Yellen Testifies
• 15:00 US ISM Non-Manufacturing PMI. Estimate 58.1 points. Actual 55.9 points
• 15:00 US Factory Orders. Estimate 1.2%. Actual 1.5%
• 15:30 US Natural Gas Storage. Estimate -22B
• 18:10 US FOMC Member Stanley Fischer Speaks

Upcoming Key Events

Friday (Dec. 4)

• 13:30 US Average Hourly Earnings. Estimate 0.2%
• 13:30 US Average Hourly Earnings. Estimate 201K
• 13:30 US Unemployment Rate. Estimate 5.0%

*Key releases are highlighted in bold

*All release times are GMT

NZD/USD for Thursday, December 3, 2015

NZD/USD December 3 at 17:20 GMT

NZD/USD 0.6620 H: 0.6671 L: 0.6625

NZD/USD Technical

• NZD/USD posted slight gains in the Asian session. The pair was flat in the European session and has posted considerable gains in North American trade.
• 0.6738 is a strong resistance line.
• 0.6605 remains a weak support line and could be tested in the North American session.
• 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 has shown limited movement, as long and short positions are an even split. This is indicative of a lack of trader bias as to which direction the pair will take next.

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.