NZD/USD loses almost 0.12% on Thursday; up 1% on the week.
Risk appetite momentum fails to push NZD/USD higher as traders’ focus shifts to the Fed in the week ahead.
The US labor market has started to slow down, as has the housing market, as data released for the week disappointed expectations.
On Thursday, the NZD/USD It broke four days of gains and barely lost nearly 0.06%, despite the upbeat mood in financial markets. US equities rise after the ECB raised rates by 50 basis points for the first time in 11 years, while better-than-expected US corporate earnings keep investors in check amid high inflation and the global economic slowdown.
The NZD/USD is trading at 0.6221. After opening near 0.6220, the pair rose to 0.6241, the daily high, but the price action changed gears and NZD/USD fell towards the daily low at 0.6184. However, the major currency recovered some ground and buyers reclaimed the 0.6200 level at the end of the American session.
Meanwhile, the USD is pulling back from daily highs, as illustrated by the US Dollar Index (DXY). DXY is down 0.13% to 106.896, which is a tailwind for NZD/USD, which has so far failed to take advantage of dollar weakness. US Treasury yields have also weakened across the board, led by the 10-year Treasury yield, which is down ten basis points to 2,923%.
US jobs data shows signs of slowing
Before Wall Street opened, the US Bureau of Labor Statistics reported that jobless claims in the week ending July 16 rose more than estimated and hit an 8-month high. The labor market is beginning to show glimpses of an aggressive Federal Reserve, but it would not deter Jerome Powell and company from reaching their goal of taming inflation to the 2% target.
At the same time, the Philadelphia Fed manufacturing index in June fell for the second consecutive month to -12.3 from -3.3. The report says that “in general, businesses continued to report increases in employment, but the employment index decreased 9 points to 19.4, the lowest reading since May 2021.”
Meanwhile, during the Asian session, New Zealand’s trade balance fell from -$9.56bn to -$10.51bn YoY (revised). Monthly figures reported a deficit of $701 million versus a surplus of $195 million in the previous month.
what to see
The absence of economic data out of New Zealand would leave NZD/USD traders adrift on US data and market sentiment. On Friday, the US docket will include S&P global PMIs, ahead of next week’s Federal Reserve monetary policy meeting.
technical levels
Source: Fx Street
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