NZD / USD extends bounce to 0.7200, appears to post modest weekly gains

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  • NZD / USD stars in a decisive recovery in the American session.
  • The US Dollar Index falls into negative territory, remains above 91.00.
  • Nonfarm payrolls in the US increased 49,000 in January.

The pair NZD / USD It fell below 0.7150 during European trading hours, but reversed its course in the second half of the day with the dollar under heavy selling pressure. At time of writing, the pair was up 0.7197, growing 0.6% on the day. With Friday’s strong rally, the NZD / USD now remains on track to end the week in positive territory.

DXY turns south after lousy NFP data

Monthly data released by the US Bureau of Labor Statistics on Friday revealed that non-farm payrolls (NFP) in the US increased by 49,000 in January. Although this impression did not deviate too far from the market expectation of 50,000, the major downward revision of the December reading from -140,000 to -227,000 caused the USD to weaken against its rivals.

Other data from the US showed that the trade balance for goods and services in December reached -66.6 billion, compared with analysts’ estimate of 65.7 billion.

The US Dollar Index (DXY), which hit its highest level in more than two months at 91.60, was last seen shedding 0.5% on the day at 91.10.

Commenting on the US employment report, “the modest 49,000 increase in nonfarm payrolls in January illustrates that the recent wave of COVID-19 cases is still weighing on the economy,” analysts at Capital Economics said. “But now that infections are drastically declining and the recent fiscal boost is ready to feed, we expect job growth to pick up in the coming months.”

Technical levels

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