Forex News

21:49:05 02-12-2021

NZD/USD awaits US Nonfarm Payrolls

  • NZD/USD was the second-best performer vs. USD on Thursday.
  • US Nonfarm Payrolls will now be the key.

Despite a more hawkish sentiment around the Federal Reserve following the set-up in Fed speaker's rhetoric, in including the Fed chair, Jerome Powell's, traders bought the dip on Wall Street. This led to a recovery in risk-FX and pushed the New Zealand dollar higher in a correction to 0.6831 from 0.6799 the low.

It would appear that the US dollar is regarded as overbought. The DXY index, which measures the greenback vs a basket of currencies, was unable to capitalise on the risks surrounding the new coronavirus variant, Omicron nor hawkish Fed speakers.

The greenback, throughout the pandemic, has been regarded as a safe haven and benefitted at times of panic and uncertainty. However, this time around, it has fallen behind the yen, CHF and even the euro. This has enabled the commodity complex to find support and has given some stability to the forex space. 

The Kiwi was the second-best performer against the USD overnight, and the bump in the USD was barely discernible, analysts at ANZ Bank explained.

''Stepping back, the Kiwi continues to hover around 0.68, with the bears citing key support at around 0.6750, and the bulls focussed on typical December seasonality. If buyers are in the wings, they are certainly not revealing themselves. Still, let’s see what tonight’s US jobs numbers look like, as that will set USD direction,'' the analysts argued. 

US Nonfarm Payrolls coming up

Looking ahead, US Nonfarm Payrolls will be key. 'Payrolls probably surged again,'' analysts at TD Securities explained. ''A strong trend continues to be signalled by surveys and claims, but our forecast also reflects the latest Homebase data—with a decline in the Homebase series more than accounted for by seasonality. Along with our +650k forecast for payrolls, we forecast a 0.2pt decline in the unemployment rate and a 0.4%MoM (5.0% YoY) rise in hourly earnings.''


News provided by the portal FXStreet