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  • NZD/USD in focus as key NZ data sits on trader’s radar for early Asia.
  • Unemployment rate expected to hold steady again at 4.2%.
  • Employment Change is expected to come in at 0.3% QoQ.
  • ATR= 40pips – 0.6520 structure at a 38.2% and 0.6420/00 range in play. 

The antipodean currencies are taking the limelight in the G10-FX space this week and following a sharp RBA induced correction to the upside in the Aussie, markets will now look to see if its sister currency, the Kiwi, can keep up the pace. Today’s fourth-quarter (Q4) jobs data will be scrutinized as the second to last economic data set ahead of the forthcoming Reserve Bank of New Zealand’s interest rate decision on the 12th of Feb – (The 10th Feb RBNZ Inflation Expectations (QoQ (Q1) will be the final critical event before the RBNZ).

The data will be released at 21:45 GMT with the unemployment rate expected to hold steady again at 4.2% despite the sharp slowing in economic momentum over the second half of 2019. However, what traders are looking for is a deviation to the upside of this number to cement the notion that the RBNZ will definitely remain on hold, considering how much stronger economic data has been in the latter part of the quarter – (GDP growth in the September quarter was much stronger than the RBNZ expected). Neither inflation nor employment gives the RBNZ immediate cause to shift the OCR, as both are close to the target. It is, therefore, pretty unlikely that the central bank will be too concerned if statistics deteriorate a little in Q4.


  • Unemployment rate expected to hold steady again at 4.2%.
  • Annual wage inflation is expected to come in also unchanged at 2.3%.
  • Employment Change is expected to come in at 0.3% QoQ.
  • Labour force participation is expected to hold steady at to 70.4% of the working-age population, a historically high level.

Analysts at ANZ are also expecting the unemployment rate to hold steady at 4.2% in Q4 with their expectation for a stable unemployment rate accounts for several factors pulling it in different directions:

  • The trend unemployment rate has drifted lower in recent years, but lifted 0.1%pts to 4.1% in Q3. This can be slow moving, but the economic backdrop suggests a step sideways is likely in Q4.

  • The sharp slowdown in economic momentum in the second half of 2019 suggests capacity in the economy opened up a touch, and that would usually be expected to translate into a slight loss of momentum in the labour market.

  • On the other hand, the technical-bounce element (statistical volatility) favours a dip lower from Q3’s read of 4.2% (which itself bounced higher from Q2’s solid 3.9% read). But – unsurprisingly – the volatility component is difficult to forecast.”

How might the data affect NZD/USD?

Not one of the best-timed releases for traders due to the typically thinner liquidity and wider spreads at this time of the day, nonetheless, we could see some action on the data. While NZD/USD finds support at the 50% region of the Oct-Dec upside range, we are seeing demand for the commodity complex today with a sharp rise of copper prices and while the GDT Price Index fell 4.7% with whole milk powder (WMP) down 6.2%, the movement was largely aligned with futures expectations and certainly not as large as some had feared, so there is already an upside bias in Kiwi leading into the event. NZD/USD rallied over 0.45% in Europan and US markets and into buy-stop-liquidity, near enough completing a 23.6% Fibonacci retracement of the downside 24th Jan move to a support structure based around the 3rd November 2019 highs. A jobs report that underpins the RBNZ staying on hold for the foreseeable future, motivated to move toads a more neutral stance than a firm dovish bias, NZD can continue to pair back short position in the spot-FX space into the 0.65 handle, testing 0.6520 structure at a 38.2% retracement before a 505 mean revision of the downtrend located around the 0.6540s. On a freak downside outcome, 0.64 the figure will be back on the bear’s agenda. It is worth noting that the daily ATR for the year has been at 40 pips. We have seen a low of 0.6449-0.6489 overnight already – However, on an outcome that vastly deviates from the expected, we have the 0.6520 structure at a 38.2% and 0.6420/00 range in play. 

Historical data


The Unemployment Rate released by the Statistics New Zealand is the number of unemployed workers divided by the total civilian labor force. If the rate is up, it indicates a lack of expansion within the New Zealand labor market. As a result, a rise leads to weaken the New Zealand economy. A decrease of the figure is seen as positive (or bullish) for the NZD, while an increase is seen as negative (or bearish).