The New Zealand Dollar (NZD) strengthened against the US Dollar (USD), with the NZD/USD pair advancing toward the 0.5700 level on Thursday. This move was driven by a weaker USD following softer-than-expected US employment data, prompting investors to reassess the Federal Reserve’s policy outlook amid signs of a cooling US labor market [1].
The US Nonfarm Payrolls report revealed that only 57,000 jobs were added in June, significantly below the anticipated 110,000. Additionally, May’s figure was revised downward to 129,000 from the previously reported 172,000, reinforcing concerns about slowing hiring momentum. The Unemployment Rate declined to 4.2%, but this was attributed in part to a drop in labor force participation to 61.5%, the lowest since 2021. Wage growth remained steady, with Average Hourly Earnings rising 3.5% year-over-year, indicating that inflation pressures persist even as job creation slows. The weak payrolls data reduced expectations for a near-term Federal Reserve rate hike [1].
Looking ahead, China remains a key external factor for the NZD, given New Zealand’s export dependence on Chinese demand. Investors are monitoring the upcoming RatingDog China Services Purchasing Managers Index (PMI) after May’s reading surged to 54.4 from 52.6, the fastest expansion in three months. A robust services PMI could bolster NZD sentiment, while a slowdown may cap further gains in NZD/USD [1].
From a technical perspective, NZD/USD trades at 0.5694, just below the 100-period Simple Moving Average (SMA) at 0.5729, despite reclaiming the 20-period SMA at 0.5673. The pair faces immediate resistance at 0.5699 and 0.5705, with further barriers at 0.5718 and 0.5729. On the downside, support is seen at 0.5690 and 0.5673 [1].
CONCLUSION
The NZD/USD pair rose as weaker US jobs data weighed on the US Dollar and dampened expectations for a near-term Fed rate hike. While technical resistance remains, the outlook for the Kiwi will also depend on upcoming Chinese economic data, which could influence further market direction.