NZD/USD has posted sharp gains in Tuesday trading. In the North American session, the pair is trading at 0.6713, up 1.2% on the day.
The volatility continues for the New Zealand dollar. The currency fell 1.1% last week, but has now recovered these losses, thanks to strong gains on Tuesday. The sharp upswing has also benefited other commodity-bloc currencies, such as the Australian dollar, with AUD/USD also up over one per cent on Tuesday. These currencies have benefited from market expectations of a “blue wave” in the US election. This means that the markets are projecting a clean Democrat sweep of the White House, as well as the House of Representatives and the Senate. This scenario has created a “buy everything” mood ahead of the election, which has pushed the US dollar lower.
New Zealand job data expected to weaken
The New Zealand dollar has posted sharp gains on Tuesday, and more movement could lie ahead, with the release of Employment Change (21:45 GMT). New Zealand often releases key events on a quarterly basis, and this is also the case with employment data. In the second quarter, Employment Change fell by 0.4%, and the markets are braced for another decline in Q3, with a consensus of -0.7 per cent. The last time we saw such a sharp decline was back in 2013, so if the actual reading is within expectations, investors could respond with a thumbs-down for the kiwi and erase some of today’s gains. As well, the unemployment rate for Q3 is projected to rise to 5.3%. This would be a huge jump from the Q2 reading of 4.0 per cent.
- NZD/USD has broken through resistance at 0.6696. The next resistance line is 0.6772, followed by resistance at 0.6819
- There is support at 0.6604, followed by support at 0.6573
- NZD/USD has crossed above the 50-day MA line, which is an indication of an upswing