- NZD/USD marks a new more than 11-week low below 0.5950 as the US Dollar bounces.
- US Dollar Rebounds Following Lower US Initial Jobless Claims Data.
- Investors expect the RBNZ to cut interest rates further this year by 50bp to 4.25%.
The NZD/USD pair marks a new more than 11-week low slightly below 0.5950 in North American trading hours on Thursday. The Kiwi pair weakens as the US Dollar (USD) rebounds following the release of United States (US) Initial Jobless Claims data for the week ending October 25. The US Dollar’s initial reaction was bearish upon the release of the data, however, it quickly recovers as claims were surprisingly lower than expected.
The US Dollar Index (DXY), which tracks the value of the Dollar against six major currencies, rebounds from the day’s low of 103.80 and is flat, at the time of writing.
People filing for unemployment benefits for the first time were lower, at 216,000 versus estimates of 230,000 and the previous reading of 228,000. This has eased fears of a short-term slowdown in labor demand. On Wednesday, unexpectedly upbeat ADP employment change data also signaled an improvement in the labor market. The agency reported that 233,000 workers were hired by the private sector in October, significantly more than the 159,000 in September.
For more information on the current health of the labor market, investors will focus on US nonfarm payrolls (NFP) data for October, due out on Friday.
Meanwhile, the New Zealand Dollar (NZD) remains under pressure amid expectations that the Reserve Bank of New Zealand (RBNZ) will cut interest rates again by a larger than usual size of 50 basis points (bps) in its monetary policy meeting on November 27. This would push the Official Cash Rate (OCR) down to 4.25%.
Economic indicator
Weekly unemployment benefit requests
Weekly unemployment benefit applications are published by the US Department of Labor and is a measure of the number of people who have filed their first claim for unemployment insurance. In other words, it provides a measure of strength in the labor market. A higher-than-anticipated number indicates weakness in the labor market, which influences the strength and direction of U.S. economic activity. In this way, a reading lower than expected is bullish for the dollar.
Last post:
Thu Oct 31, 2024 12:30
Frequency:
Weekly
Current:
216K
Dear:
230K
Previous:
227K
Fountain:
US Department of Labor
Every Thursday, the US Department of Labor releases the number of initial claims for unemployment benefits for the previous week in the US. Since this reading could be very volatile, investors may want to pay more attention to the average four weeks. A bearish trend is considered a sign of an improving labor market and could have a positive impact on the performance of the USD against its rivals and vice versa.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
