Key Moments
- NZD/USD trades around 0.5680, up 0.16%, as investors trim USD exposure before the US Nonfarm Payrolls release.
- Weaker-than-expected US ADP jobs and ISM Manufacturing PMI data have weighed on the US Dollar and tempered Fed tightening expectations.
- New Zealand Dollar outperforms the US Dollar on the day, while markets await both US labor data and New Zealand Consumer Confidence.
NZD/USD Lifts as Dollar Weakens Ahead of NFP
NZD/USD is trading higher around 0.5680 on Thursday at the time of writing, showing a 0.16% gain on the day. The move reflects investors scaling back exposure to the US Dollar ahead of the upcoming US Nonfarm Payrolls (NFP) report. The pair has been supported by broad softness in the Greenback following a run of underwhelming US economic data and a less hawkish tone from Federal Reserve (Fed) Chair Kevin Warsh.
US Data Misses Expectations, Dimming Aggressive Fed Bets
Recent US releases have pressured the Dollar. The ADP Employment Change report indicated that the US private sector created 98K jobs in June, falling short of market expectations. At the same time, the Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) slipped to 53.3, also coming in below forecasts.
These softer figures have curbed expectations for a more aggressive tightening cycle by the Fed and redirected market attention to the official employment data for confirmation on the policy outlook.
Warsh Comments Seen as Less Hawkish
Speaking at the European Central Bank (ECB) Forum on Wednesday, Kevin Warsh emphasized that inflation remains above the central bank’s 2% target but did not provide explicit guidance on the next policy step. His remarks were interpreted as less hawkish than anticipated, adding further downward pressure on the US Dollar.
Improving Geopolitical Tone Reduces Safe-Haven Demand
Risk sentiment has also benefited from signs of easing geopolitical tensions in the Middle East. Qatari officials reported advances in discussions between the United States and Iran, while US Vice President JD Vance indicated that talks were progressing in a positive manner. This combination has reduced demand for traditional safe-haven assets, including the US Dollar.
NZD Supported but Oil Prices Cap Upside
On the New Zealand side, the New Zealand Dollar remains underpinned against the US Dollar. However, softer Oil prices could cap further NZD strength by lowering inflation pressures and dialing back expectations for additional interest rate hikes from the Reserve Bank of New Zealand (RBNZ). Investors are also set to watch New Zealand’s Consumer Confidence data, scheduled for Friday, for additional direction.
Focus Turns to US Nonfarm Payrolls
Market participants are now looking to the NFP report for the next major catalyst. A stronger-than-expected reading could lend support to the US Dollar by reinforcing the view that interest rates will stay elevated for an extended period. Conversely, a weaker outcome could deepen the current bout of Dollar weakness and potentially allow NZD/USD to build on its recent gains.
New Zealand Dollar Performance Against Majors
The table below shows the percentage change of the New Zealand Dollar (NZD) versus a range of major currencies today. According to the data, the New Zealand Dollar has been strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.32% | -0.41% | -0.76% | -0.06% | -0.03% | -0.13% | -0.47% | |
| EUR | 0.32% | -0.09% | -0.46% | 0.25% | 0.29% | 0.21% | -0.15% | |
| GBP | 0.41% | 0.09% | -0.34% | 0.34% | 0.38% | 0.30% | -0.06% | |
| JPY | 0.76% | 0.46% | 0.34% | 0.68% | 0.73% | 0.60% | 0.28% | |
| CAD | 0.06% | -0.25% | -0.34% | -0.68% | 0.04% | -0.05% | -0.41% | |
| AUD | 0.03% | -0.29% | -0.38% | -0.73% | -0.04% | -0.08% | -0.46% | |
| NZD | 0.13% | -0.21% | -0.30% | -0.60% | 0.05% | 0.08% | -0.36% | |
| CHF | 0.47% | 0.15% | 0.06% | -0.28% | 0.41% | 0.46% | 0.36% |
The heat map reflects percentage changes between the listed currencies. The base currency is shown in the left-hand column and the quote currency in the top row. For instance, selecting the New Zealand Dollar in the left column and moving across to the US Dollar cell displays the percentage move for NZD (base)/USD (quote).
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