NZD/USD – New Zealand Dollar Steady, US Posts Mixed Job Numbers

NZD/USD has posted slight losses on Thursday, trading just above the 0.65 line in the North American session. In New Zealand, the Manufacturing Index dipped to 53.3 points. The Food Price Index disappointed with a decline of 1.2%. In economic news, today’s big numbers were US employment numbers. Unemployment Claims was unchanged at 276 thousand, disappointing the markets. There was  much better news from JOLT Job Openings, which came in at 5.53 million, well above the estimate. Traders should be prepared for volatility on Friday, as the US releases Retail Sales, PPI and UoM Consumer Confidence.

New Zealand numbers were mixed on Wednesday. The Manufacturing Index dropped to 53.3 points, but the indicator has been above the 50 line for close to three years, pointing to steady expansion in the manufacturing sector. The Food Price Index continues to struggle, posting a decline of 1.2%. This marked the indicator’s third straight decline. With the New Zealand economy showing some weakness, there has been pressure on the RBNZ to reduce interest rates, although the RBNZ did not make a move in October, leaving rates at 2.75%. The central bank released its Financial Stability Report on Tuesday, and signaled that a rate cut in December was unlikely, stating “there is less scope for monetary policy easing to offset a sharp rise in funding spreads.” At the same time, the report expressed concerns about the strength of the housing and dairy sectors, two key areas of the economy. High interest rates will buffer the kiwi to an extent, but the currency will be hard pressed to hold its own against the flying US dollar, especially if next week’s key releases, led by Retail Sales, miss expectations.

After a stellar performance by Nonfarm Payrolls last week, the markets were hoping for an encore from Thursday’s job numbers. Unemployment Claims came in at 276 thousand for a second straight week, higher than the estimate of 270 thousand. This should not be a cause for concern, since the four-week indicator, which is less volatile than the weekly measurement, remains at very low levels. Meanwhile, JOLTS Job Openings surged to 5.53 million, crushing the forecast of 5.38 million.

The Fed policy statement was unexpectedly hawkish in October, and this has understandably fueled market speculation about a rate hike in December. At the same time, the Fed has been split over a rate hike for quite some time, and many members will be hesitant to vote in favor of raising rates unless they are confident that the US economy can withstand an interest rate hike. Employment numbers out of the US have certainly improved, with recent indicators such as the unemployment rate pointing to close to full employment in the US economy. At the same time, other indicators have not fared as well, particularly manufacturing data and inflation levels. While a rate hike in December is back on the front burner, it is by no means a done deal, making for plenty of speculation on the part of market players in the next several weeks regarding a possible move by the Fed.

NZD/USD Fundamentals

Thursday (Nov. 12)

• 13:30 US Unemployment Claims. Estimate 270K. Actual 276K
• 14:30 US Federal Reserve Chair Janet Yellen Speaks
• 15:00 US JOLTS Openings. Estimate 5.39M. Actual 5.53M.
• 15:15 US FOMC Member Charles Evans Speaks
• 16:00 US Crude Oil Inventories. Estimate 0.8M
• 15:15 US FOMC Member William Dudley Speaks
• 18:01 US 30-year Bond Auction
• 19:00 US Federal Budget Balance. Estimate -130.2B
• 23:00 US FOMC Member Stanley Fischer Speaks

Upcoming Key Events

Friday (Nov. 13)

• 13:30 US Core Retail Sales. Estimate 0.4%
• 13:30 US PPI. Estimate 0.2%
• 13:30 US Retail Sales. Estimate 0.3%
• 15:00 US Preliminary UoM Consumer Sentiment. Estimate 91.3 points
  

*Key releases are highlighted in bold

*All release times are GMT

NZD/USD for Thursday, November 12, 2015

NZD/USD November 12 at 15:35 GMT

NZD/USD 0.6525 H: 0.6579 L: 0.6496

NZD/USD Technical

• NZD/USD was flat in the Asian session and posted slight losses in the European session. NZD/USD is steady in North American trade.
• 0.6605 is an immediate resistance line.
• 0.6449 is providing support line.
• Current range: 0.6449 to 0.6605

Further levels in both directions:

• Below: 0.6449, 0.6368 and 0.6233
• Above: 0.6605, 0.6738 and 0.6897

OANDA’s Open Positions Ratio

NZD/USD ratio is unchanged, consistent with the lack of any significant movement by the pair. NZD/USD remains split between long and short positions, indicative of a lack of trader bias as to what direction the pair will take next.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.