NZD/USD – Kiwi Gains Continue, US Jobless Claims Jumps

NZD/USD has posted slight gains on Thursday, continuing the trend which has marked the pair all week. At the start of the North American session, the pair is trading at 0.6940. On the release front, New Zealand ANZ Business Confidence softened in March, with a reading of 3.2 points. In the US, Unemployment Claims rose to 276 thousand, missing expectations.

The New Zealand dollar has soared this week, gaining 270 points against the US dollar, as NZD/USD trades at its highest level since June 2015. The kiwi jumped after Janet Yellen surprised the markets with an ultra-dovish speech in New York. Yellen served notice that the Fed would continue its cautious approach towards monetary tightening, given the collapse of oil prices and risks due to the Chinese slowdown. Yellen downplayed higher inflation levels, which in January reached 1.7 percent, the highest in almost two years. This reading is not far from the Fed’s target of 2.0 percent and some Fed members have gone on record saying that the Fed should raise rates before inflation pushes above the 2.0 percent threshold. At the same time, Yellen acknowledged that there were encouraging signs in the US economy, including a strong labor market. Her comments dampened recent speculation about an April rate hike, which was precipitated by a flurry of hawkish comments from Fed officials. It will be interesting to see if Yellen’s cautious assessment will be reinforced or challenged by Fed members in the coming days.

With the Fed sending the markets mixed messages about the timing of a rate hike, this week’s employment numbers, highlighted by Nonfarm Payrolls, are under the market microscope. On Thursday, Unemployment Claims rose last week by 276 thousand, considerably higher than the estimate of 266 thousand. This followed a solid ADP Nonfarm Employment Change report, which came in at 200 thousand, above the estimate of 195 thousand. The week wraps up with the official Nonfarm Payrolls on Friday. The forecast stands at 206 thousand. If the indicator stays within expectations, we could see the US dollar reverse some of this week’s losses.

NZD/USD Fundamentals

Wednesday (March 30)

• 20:00 New Zealand ANZ Business Confidence. Actual 3.2 points

Thursday (March 31)

• 7:30 US Challenger Job Cuts. Actual 31.7%
• 8:30 US Unemployment Claims. Estimate 266K. Actual 276K
• 9:45 US Chicago PMI. Estimate 50.5
• 10:30 US Natural Gas Storage. Estimate -20B
• 17:00 US FOMC Member William Dudley Speaks

Upcoming Key Events

Friday (April 1)

• 8:30 US Average Hourly Earnings. Estimate 0.2%.
• 8:30 US Nonfarm Employment Change. Estimate 206K
• 8:30 US Unemployment Rate. Estimate 4.9% 

*Key releases are highlighted in bold

*All release times are DST

NZD/USD for Thursday, March 31, 2016

NZD/USD March 31 at 8:50 DST

Open: 0.6900 Low: 0.6880 High: 0.6955 Close: 0.6947

NZD/USD Technical

• NZD/USD was flat in the Asian session. The pair has posted slight gains in European trade.
• 0.6897 was tested earlier in support and is a weak line
• There is resistance at 0.7011

Further levels in both directions:

• Below: 0.6897, 0.6738, 0.6605 and 0.6449
• Above: 0.7011, 0.7100 and 0.7231
• Current Range: 0.6897 to 0.7011

OANDA’s Open Positions Ratio

The NZD/USD ratio is unchanged on Thursday. Long and short positions are close to an even split, indicative of a lack of trader bias as to what direction NZD/USD 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.