Home Forex NZD/USD strengthens above 0.6100, Michigan sentiment data looms

NZD/USD strengthens above 0.6100, Michigan sentiment data looms

by SuperiorInvest


  • NZD/USD is strengthening near 0.6120, adding 0.13% on the day.
  • US Initial Jobless Claims Hit Lowest Level Since September 2022.
  • New Zealand’s Business NZ PMI fell to 43.1 in December from 46.7 in November.

The NZD/USD pair is trading positive at the start of the Asian session on Friday. The pair is finding support near the 100-day exponential moving average (EMA) at 0.6115 and is currently trading around 0.6120. Next week’s New Zealand Consumer Price Index (CPI) will be a closely watched event and could offer further clues Monetary Policy update from the Reserve Bank of New Zealand (RBNZ).

The Labor Department revealed on Thursday that US Initial Jobless Claims hit their lowest level since September 2022. Initial jobless claims fell to 187,000 in the week ended January 13 from 203,000 in the previous reading. Continuing claims totaled 1.806 million, better than the estimate of 1.845 million.

The positive data could make it harder for the Federal Reserve (Fed) to start cutting interest rates rates in March. Investors cut their bets on a rate cut at the March meeting below 60%, according to CME Group’s FedWatch Tool.

On the kiwi front, markets are expecting RBNZ will begin the easing cycle in August 2024, bringing the OCR to 3.5% over 12 months. Traders will take further cues from New Zealand inflation data next week. Core CPI is expected to slow sharply in Q4 from 5.6% to 4.7% y-o-y (0.6% qoq).

The latest data from Business NZ showed New Zealand’s manufacturing performance index (PMI) fell to 43.1 in December from 46.7 in November. The figure marked the ninth straight month of contraction in New Zealand manufacturing activity.

Going forward, market participants will be watching the preliminary US Michigan consumer sentiment index for January and existing home sales. Later in the day, FOMC members M. Daly (San Francisco) and M. Barr (Board of Governors) are scheduled to deliver speeches. These data could give a clear direction to the NZD/USD pair.

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