NZD/USD remains on track to finish the week more than 100 pips lower

• NZD/USD recovers modestly on Friday.
• Disappointing employment data weighs on the NZD this week.
• US Dollar Index looks to post its highest weekly close of 2019.

The NZD/USD pair dropped to its lowest level in more than two weeks at 0.6730 earlier today before retracing a very small part of its weekly decline. As of writing, the pair was trading at 0.6748, staying unchanged on a daily basis.

Earlier this week, the disappointing labour market report from New Zealand, which revealed that the unemployment rate rose to 4.3% in the fourth quarter vs the analysts’ estimate of 4.1%, weighed on the kiwi while the broad-based USD strength didn’t allow the pair to make a decisive recovery. With the greenback going into a consolidation phase toward the end of the week, the US Dollar Index is virtually flat on the day near 96.60, staying on track to finishing the week more than 1% higher.

In addition to the dismal data from New Zealand, headlines surrounding the U.S. – China trade conflict and the heavy commodity sell-off this week put additional weight on the NZD’s shoulders. According to several news outlets, President Trump is not planning to meet his Chinese counterpart before the March 1 deadline, which revives the possibility of the U.S. continuing to impose tariffs on Chinese goods for a longer period than markets were hoping for.

Key technical levels