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NZD / USD approaches 0.7100 as RBNZ rate hike is expected

  • Kiwifruit is rising strongly across the market following data from New Zealand.
  • The dollar with mixed results in the market before ADP.

The NZD / USD extended the bullish run in the European session and climbed to 0.7083, reaching the highest level in a week. In the previous data from the US, it remains in the zone of the maximums, supported by the strength of the kiwi.

Expectations of higher rates rise, NZD rises

The New Zealand employment data was better than expected, showing a drop in the unemployment rate in the second quarter from 4.6% to 4%, and with employment rising 1%, above the 0.7% expected.

Westpac’s Michael Gordon says that following the report the market has moved in favor of a rise in the Reserve Bank of New Zealand’s benchmark interest rate for August, even with the possibility of an increase of 50 basis points. They do not see the latter as the most probable, but they do not rule it out.

The Kiwi is the currency that rises the most on Wednesday in the G10. The strong fall of the AUD / NZD below 1.0500, to the lowest since November last year, stands out.

The focus of data now shifts to the US. where at 12:15 GMT the ADP employment report will be published, which is expected to show an increase in jobs of around 690,000. Then it will be the turn of the final figures from the PMI Markit for the services sector and then the ISM. When it comes to speeches, there will be Richard Clarida, vice chairman of the Federal Reserve. On Friday it will be the turn of the non-farm payrolls.

Technical levels

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