- The pair remains stuck in an extremely narrow band.
- US Dollar Index posts small gains above 97.
- NFP is expected to come in at 185K in May.
After closing the previous day virtually unchanged above the 0.66 mark, the NZD/USD pair extended its sideways movement on Friday as investors seem to be opting out to remain on the sidelines ahead of the critical data from the U.S. As of writing, the pair was flat on the day at 0.6620.
The U.S. Bureau of Labour Statistics today will publish its jobs report which will include nonfarm payrolls, average hourly earnings, unemployment rate, and labour force participation rate for May. The fact that the ADP private sector employment report on Wednesday missed the market expectation by a wide margin suggests that the NFP could fall short of the analysts’ estimate of 185K.
At the moment, the US Dollar Index is up 0.09% on a daily basis at 97.08. A worse-than-expected NFP reading and soft wage inflation numbers could force the greenback to come under a renewed selling pressure ahead of the weekend.
“The highlight will of course be US payrolls, seen up 175K despite the feeble ADP print earlier in the week. If we were to get a weak reading today then market screams for a Fed cut will only accelerate. Yields will tumble, equities will soar (stupidly), and the USD will likely wobble,” Rabobank analysts said previewing the data.
“However, once people realise that the US cold will be pneumonia elsewhere, the USD should not stay down for long. If we get an in-line of strong print then ironically markets might be unhappy, and the USD perky.”
Technical levels to consider
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