NZD/ USD – Kiwi Steady, US Posts Weak Job Report

The New Zealand dollar is steady on Thursday, following strong gains a day earlier. NZD/USD is trading at 0.6450 in the North American session. In economic news, the New Zealand Manufacturing Index improved to 56.7 points. In the US, Unemployment Claims disappointed, jumping to an 11-month high. The Philly Fed Manufacturing Index also declined, but managed to beat the estimate.

New Zealand releases have been mixed this week. NZIER Business Confidence kicked off the week with a strong reading of 15 points, compared to -14 points a month earlier. The Business NZ Manufacturing Index continues to point upward and climbed to 56.7 points in December, the highest reading in all of 2015. At the same time, the GDT Price Index posted a second straight decline, coming in at -1.4%. The news was not good on the inflation front, as CPI came in at -0.5% in the fourth quarter, compare to +0.3% in the third quarter. This figure missed expectations and marked the sharpest decline since 2008. Like other minor currencies, the New Zealand dollar has endured a miserable January, as the oil collapse and Chinese slowdown has seen investors scurry to safe-haven assets, such as the US dollar, at the expense of risky currencies like the New Zealand dollar.

It was another bad day for US releases. Following weak CPI reports on Wednesday, employment numbers missed expectations on Thursday. Unemployment Claims jumped to 293 thousand, close to the symbolic 300-thousand level, and much higher than the estimate of 279 thousand. This was the key indicator’s highest level since February 2015, and will likely dampen enthusiasm for a rate hike in March. Federal Reserve members have also expressed concern about weak inflation levels, and weak CPI numbers for December will not help the case to raise rates for a second time, following the historic rate hike in December. The Fed will hold its monthly policy meeting next week, and although the Fed statement may provide some clues about future monetary policy, it’s very unlikely that the Fed will raise rates at the January meeting.

NZD/USD Fundamentals

Wednesday (Jan. 20)

  • 16:30 New Zealand Business NZ Manufacturing Index. Estimate 56.7 points

Thursday (Jan. 21)

  • 8:30 US Philly Fed Manufacturing Index. Estimate -5.8 points. Actual -3.5 points
  • 8:30 US Unemployment Claims. Estimate 279K. Actual 293K
    • 10:30 US Natural Gas Storage. Estimate -180B. Actual 178B
  • 11:00 US Crude Oil Inventories. Estimate 3.3M. Actual 4.0M

*Key releases are highlighted in bold

*All release times are EST

NZD/USD for Thursday, January 21, 2016

NZD/USD January 21 at 11:10 GMT

Open: 0.6467 Low: 0.6410 High: 0.6486 Close: 0.6479

NZD/USD Technical

S3 S2 S1 R1 R2 R3
0.6233 0.6344 0.6449 0.6605 0.6738 0.6897
  • NZD/USD posted losses in the Asian session and leveled off in European trade. The pair has posted gains in North American trade
  • There is resistance at 0.6605
  • 0.6449 was tested earlier in support and remains a weak line
  • Current range: 0.6449 to 0.6605

Further levels in both directions:

  • Below: 0.6449, 0.6344, 0.6233 and 0.6152
  • Above: 0.6605, 0.6738 and 0.6897

OANDA’s Open Positions Ratio

In the NZD/USD ratio there has been some movement towards short positions, which command a majority of positions (58%). This is indicative of trader bias towards the pair reversing directions and moving lower.

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.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.