New Zealand Dollar softens below 0.5900 after Unemployment Rate rises to decade high
The NZD/USD pair loses momentum to near 0.5875 during the early Asian trading hours on Wednesday. The New Zealand Dollar (NZD) weakens against the US Dollar (USD) following the employment report.
The New Zealand Dollar (NZD) weakened against the US Dollar (USD) following the release of a new unemployment rate, which climbed to a decade-high of 5.6% in June, up from 5.3% in Q1. This figure surpassed market expectations of 5.4%. NZD also experienced a dip due to traders preparing for China's Rating Dog Services Purchasing Managers Index (PMI) data, which could provide additional impetus.
New Zealand's employment change rose 0.5% in Q2, compared to the 0.2% increase in Q1, above market expectations. The participation rate in New Zealand increased to 70.7% in Q2, up from 70.4% previously. The positive sentiment towards a potential deal to reopen the Strait of Hormuz may further support the NZD. Some analysts, such as those at ING, prefer a Reserve Bank of New Zealand (RBNZ) rate hike later in the year, citing recent increased conviction around a September move.
The NZD's technical analysis shows it holding above the 20-period Bollinger middle band and the 100-day moving average, indicating a bullish near-term bias. With China's economy and dairy prices also influencing the NZD, investors closely monitor these factors.
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