NZD/USD has posted slight losses on Monday, as the pair is trading at 0.6640 line in the North American session. In economic news, it’s a very quiet start to the week. In the US, there is just one minor event on the schedule, Labor Markets Conditions Index. There are no New Zealand releases on the calendar.
There was a mid-week selloff of the US dollar, and the New Zealand dollar jumped on the bandwagon with impressive gains. The kiwi jumped on a host of soft US numbers, notably employment data. On Wednesday, ADP Nonfarm Payrolls dropped to 205 thousand in January, much weaker than 257 thousand a month earlier. There was further weak data from ISM Non-Manufacturing PMI, a key gauge of the services sector. The index dipped to 53.2 points in January, its worst showing since March 2014. Unemployment Claims were higher than expected and the week wrapped up with a dismal Nonfarm Payrolls report, with a small gain of 151 thousand. The markets had expected a much stronger gain of 189 thousand. No less worrying, this figure marks a sharp drop from the previous reading of 292 thousand. However, NZD/USD reversed directions on Friday and lost over 100 points. This followed a positive wage growth report, as Average Hourly Earnings jumped to 0.5% in January, above the estimate of 0.3%. This marked the indicator’s strongest gain in 12 months.
The New Zealand dollar posted strong gains last week, but remains at low levels. NZD/USD endured a dreadful month of January, losing close to 400 points against its US counterpart. The New Zealand economy has been badly hit by the Chinese slowdown, as the Asian giant is New Zealand’s second largest trade partner. Chinese indicators have painted a grim picture, as GDP continues to edge lower and recent manufacturing PMIs have pointed to a slowdown in the Chinese manufacturing sector, resulting in lower demand for New Zealand exports. Up next is the Business NZ Manufacturing Index, which will be released on Wednesday.
Monday (Feb. 8)
- 10:00 US Labor Market Conditions Index
*Key releases are highlighted in bold
*All release times are EST
NZD/USD for Monday, February 8, 2016
NZD/USD February 8 at 11:35 EST
Open: 0.6627 Low: 0.6592 High: 0.6659 Close: 0.6634
- NZD/USD has shown limited movement in the Asian and European sessions
- 0.6605 was tested earlier in support and remains under strong pressure.
- There is resistance at 0.6738.
Further levels in both directions:
- Below: 0.6605, 0.6449, 0.6344 and 0.6233
- Above: 0.6738, 0.6897 and 0.7011
OANDA’s Open Positions Ratio
The NZD/USD ratio has shown slight movement towards short positions, which have a majority (56%). This is indicative of trader bias towards the pair continuing to move lower.