NZD/USD clings to daily gains around 0.6650, eyes on US ADP jobs report

• NZD/USD pair is clinging to modest daily gains on Wednesday.
• US Dollar Index stays in the negative territory.
• US’ private sector is expected to add 1.5 million jobs in July.

The NZD/USD pair registered small daily gains on Tuesday and continued to push higher during the Asian session on Wednesday. Although the pair touched a fresh daily high of 0.6668 during the European trading hours, it struggled to preserve its momentum and went into a consolidation phase. As of writing, NZD/USD was trading at 0.6650, gaining 0.43% on a daily basis.

Upbeat labour market data from New Zealand boosts kiwi

Easing geopolitical tensions between the US and China helped the China-sensitive kiwi gather strength on Wednesday. More importantly, the data published by Statistics New Zealand revealed that the Unemployment Rate in the second quarter fell from 4.2% to 4% and came in much better than the market expectation of 5.8%. 

On the other hand, the USD’s dismal performance amid slumping Treasury bond yields on Tuesday helped NZD/USD gain traction. Despite a strong rebound witnessed in the US T-bond yields on Wednesday, the US Dollar Index stays in the negative territory below 93.

In the early trading hours of the American session, the ADP will release the private sector’s jobs report. Markets expect the ADP employment Change to arrive at 1.5 million in July. Previewing this data, “if ADP is as expected or worse the dollar’s weakness will be reinstated,” said FXStreet analyst Joepsh Trevisani. “If the anticipated slowdown in hiring does not occur, short dollar positions will suddenly be a good deal less valuable.”

Technical levels to watch for