NZD / USD Extends Gains Driven by New Zealand Employment Data

• The NZD / USD received a big boost on Wednesday in reaction to upbeat employment data in New Zealand.
• The dollar presents mixed results in the market awaiting data from ADP and the FOMC.

The NZD / USD maintained its tone of demand during the European session and reached new daily highs at the 0.7140 area.

After having shown some resilience below 0.7100, NZD / USD bounced modestly from the very important 200-day SMA and recovered part of the previous drop to two-week lows. The gains followed the release of better-than-expected employment data from New Zealand and was later supported by a lack of direction in the dollar.

According to official data released Wednesday, total employment increased from 0.4% to 2.0% during the third quarter of 2021. In addition, New Zealand’s unemployment rate fell from 4.0% to 3.4% or a record low set in the fourth quarter. 2007. The data pointed to the underlying strength of the economy and reinforces the case for another rise in interest rates by the Reserve Bank of New Zealand.

On the other hand, the dollar had difficulties to capitalize on the positive movement of the previous day and was seen to consolidate in a range ahead of the critical monetary policy decision of the FOMC. The Fed is widely expected to begin cutting its $ 120 billion a month asset purchase program.

The markets seem convinced that the Fed would be forced to adopt a more aggressive policy response to contain higher inflationary pressures. Therefore, the focus will remain glued to the attached monetary policy statement and the Fed chairman’s comments, Jerome Powell, at the press conference after the meeting, which will influence short-term price dynamics in dollars.

Prior to the Fed, the ADP private employment report and the ISM services PMI will be published; Important facts about the American economy.

Technical levels