NZD/USD steadies near 0.6750, looks to close in red for second straight day

• Unabated USD strength weighs on the pair.
• Commodity sell-off hurts the kiwi on Thursday.

After losing more than 100 pips following the disappointing labour market data from New Zealand, which showed that the unemployment rate rose to 4.3% in the fourth quarter from 4% in the third quarter, the NZD/USD pair struggled to make a meaningful recovery on Thursday and now looks to close the day in the negative territory near 0.6750, where it’s down 0.35% on a daily basis.

Assessing the employment data,  “The labour market has gradually tightened over the past year, but the pace of improvement is slowing,”  Michael Gordon, senior economist at Westpac, said. “The Quarterly Employment Survey increased the risk of a weak December quarter GDP result.”

Additionally, the risk-off environment today weighed on commodities and risk-sensitive currencies to keep the selling pressure on the kiwi intact throughout the day.

On the other hand, the greenback carried its rally into a sixth day today and made it even more difficult for the pair to erase its losses. Despite a lack of fundamental drivers that could support the USD’s upsurge, the US Dollar Index reached its highest level in two weeks at 96.67 with investors staying away from European currencies, which suffer from disappointing macroeconomic data releases from the euro area and the uncertainty surrounding the Brexit. At the moment, the DXY is adding 0.2% on the day at 96.58.

Key technical levels