NZD/USD drops to fresh daily lows near 0.6650 ahead of key US jobs report

• NZD/USD is edging lower ahead of important US data releases.
• US Dollar Index rebounds above 93.00 on Friday.
• Investors expect Nonfarm Payrolls (NFP) in US to increase by 1.6 million.

The NZD/USD pair closed the third straight day in the positive territory on Thursday but failed to preserve its bullish momentum on Friday. As of writing, the pair was down 0.55% on a daily basis at 0.6648.

USD holds firm ahead of NFP data

The risk-averse market environment is helping the greenback gather strength against its rivals as a safe-haven. The US Dollar Index, which posted small daily losses to close at 92.77 on Thursday, was last up 0.45% on the day at 93.20.

In the second half of the day, the US Bureau of Labor Statistics will release its highly-anticipated labour market report. Investors expect Nonfarm Payrolls (NFP) to come in at +1.6 million in July.

Previewing the data, “currency markets have punished the US dollar over the last three weeks expecting that the second wave of COVID cases would extract a large economic cost in the US,” said FXStreet analyst Joseph Trevisani. “Traders have kept their heads down this week waiting for the Friday payroll numbers. Regardless of the state of jobless claims, if payrolls are good the dollar will rebound.”

Meanwhile, investors will keep a close eye on developments surrounding the US lawmakers coronavirus relief bill negotiations. 

Earlier in the day, the data from China revealed that the trade surplus in July widened to $62.33 billion to beat the market expectation of $42 billion by a wide margin but failed to provide a boost to the China-proxy kiwi.

Technical levels to watch for