The New Zealand dollar remains lackluster, as NZD/USD has been marked by limited movement all week. Early in Wednesday’s North American session, the pair is trading at 0.6550. In economic news, today’s highlight is US Crude Oil Inventories. There are no New Zealand events on Wednesday. The next major event is US Unemployment Claims, which will be released on Thursday.
The New Zealand dollar has not had a good start to the New Year, losing close to 300 points against the US dollar last week. The currency mimicked the movement of other minor currencies, such as the Australian and Singapore dollars, which also suffered sharp losses last week, as nervous investors dumped minor currencies like the New Zealand dollar in favor of the safe-haven US dollar, due to recent events in China. The Chinese stock market has started 2016 with sharp losses, and a surprise devaluation of the Chinese yuan reduced any appetite for risk, further weakening the kiwi.
US employment numbers continue to shine, underscoring a robust US labor market. JOLTS Job Openings improved to 5.43 million, beating the estimate of 5.41 million and above the previous reading of 5.38 million. Late last week, Nonfarm Employment Change, one of the most important indicators, surged to 292 thousand, crushing the estimate of 203 thousand. This was the strongest reading in 10 months. The unemployment rate remained unchanged at 5.0%, within the Federal Reserve’s definition of “full employment”. One area of concern in the employment picture is that of wage growth, which has not kept up with the strong improvement in payrolls. Even if the US economy is technically at “full employment”, slack remains in the labor market, meaning that employers are not under any pressure to raise wages. This was underscored by Average Hourly Earnings in December, which posted a flat reading of 0.0%, short of the forecast of 0.2%. This key event is a leading indicator of consumer inflation, meaning that wages must increase before consumers will spend more, thus leading to more inflation. The Fed has hinted that the December rate is the first of a series of incremental moves in 2016, and inflation levels will play an important role in any decision to raise rates.
Wednesday (Jan. 13)
- 10:30 US Crude Oil Inventories. Estimate 1.9M
- 13:01 US 10-year Bond Auction
- 14:00 US Beige Book
- 14:00 US Federal Budget Balance. Estimate -2.7B
Upcoming Key Events
Thursday (Jan. 14)
- 8:30 US Unemployment Claims. Estimate 275K
*Key releases are highlighted in bold
*All release times are EST
NZD/USD for Wednesday, January 13, 2016
NZD/USD January 13 at 8:50 GMT
Open: 0.6538 Low: 0.6535 High: 0.6589 Close: 0.6555
- NZD/USD has been marked by limited movement in the Asian and North American sessions
- There is resistance at 0.6605
- 0.6449 continues to provide support
- Current range: 0.6449 to 0.6605
Further levels in both directions:
- Below: 0.6449, 0.6368 and 0.6233
- Above: 0.6605, 0.6738, 0.6897 and 0.70
OANDA’s Open Positions Ratio
The NZD/USD ratio is unchanged, as long and short positions are almost an even split. This is indicative of a lack of trader bias as to which direction the pair will take next.