- NZD/USD turned south after trading around 0.7200 earlier in the day.
- Broad-based USD strength continues to drag NZD/USD lower.
- Focus shifts to US January Nonfarm Payrolls report.
The NZD/USD pair moved sideways around 0.7200 during the first half of the day but lost its traction in the American session amid renewed USD strength. As of writing, the pair was down 0.7% on a daily basis at 0.7156.
DXY rally remains intact as focus shifts to NFP
Earlier in the day, the sharp upsurge witnessed in the GBP/USD pair following the Bank of England’s (BOE) policy announcements made it difficult for the greenback to preserve its strength. Nevertheless, the US Dollar Index (DXY) reversed its course with American traders returning to markets and rose to its highest level in more than two weeks at 91.58. At the moment, the DXY is gaining 0.4% on the day at 91.55 and is up more than 1% since the beginning of the week.
The data published by the US Department of Labor showed on Thursday that Initial Jobless Claims last week declined by 33,000 to 779,000 and came in better than the market expectation of 830,000.
There won’t be any macroeconomic data releases from New Zealand on Friday and investors will be awaiting the Nonfarm Payrolls (NFP) report from the US. The market consensus points out to a 50K increase in NFP following December’s disappointing reading of -140K. A strong reading could help the USD end the week on a firm footing and force NZD/USD to stay under bearish pressure.
Technical levels to watch for
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