NZD steadies as US non-farm payrolls loom
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Daily Currency Update
The New Zealand dollar held onto Wednesday’s recovery back above US$0.61 through trade on Thursday amid a risk on mood and further broad-based USD downside. Fading concerns surrounding the rise of the far-right French political party the National Rally helped bolster risk demand through the overnight session, fueling euro gains and USD losses. With the USD on the back foot, improved risk sentiment helped prop up commodity-led currencies and the NZD set about consolidating its rebound back above US$0.61, marking intraday highs just north of US$0.6122. The question now is, can the NZD sustain the recovery? Our focus now turns to the US non-farm payroll numbers this evening. The consensus is that payroll activity will slow after the robust May print, while the unemployment rate should continue to seek higher and average hourly earnings will be critical in influencing inflation expectations. NZD upside could be quickly reversed if payroll gains outpace expectations. At the same time, a softer print could be the catalyst needed to consolidate the week's upside extension and lead the NZD back toward US$0.62.Key Movers
Despite US markets closing in observance of Independence Day celebrations, there has been steady price action through the last 24 hours with the USD extending Wednesday’s sell-off amid improved risk sentiment. The euro pushed above US$1.08 following polling that indicates Marine Le Pen’s far-right National Rally party is highly unlikely to win an absolute majority dampening fears of fiscal recklessness. Having touched intraday highs at US$1.0814, the euro held near that level through the daily close. With the USD on the back foot, the Japanese yen even managed to seek out small gains and is the 2nd strongest major through the last 24 hours, up more than three-tenths of a percent. In the UK Exit Polls suggest a labour landslide adding some upside to the GBP, but until results are confirmed and official polling filters in GBP are likely to track sideways. Outside the UK election result our focus turns to US non-farm payrolls. With the USD giving up ground this week a softer print could see markets consolidate and extend losses while an upside surprise gives license to investors to retrace the move and prop up the USD into the weekly close.Expected Ranges
- NZD/USD: 0.6050 - 0.6200 ▲
- NZD/EUR: 0.5600 - 0.5700 ▲
- GBP/NZD: 2.0700 - 2.0900 ▼
- NZD/AUD: 0.9050 - 0.9150 ▼
- NZD/CAD: 0.8280 - 0.8380 ▼