The New Zealand Dollar urge higher ahead of Jobs report
The Kiwi advance against the US dollar in trading today ahead of the NZ jobs report which could set the tone for the Kiwi.
New Zealand will release key employment data for the second quarter on Tuesday. These top-tier events are the most important announcements ahead of the next policy meeting on August 18. Quarterly changes in employment and the publication of the unemployment rate can significantly affect the trend of the New Zealand dollar / US dollar.
Changes in employment are expected to increase 0.7%, which is not much different from 0.6% in the first quarter. The unemployment rate has been decreasing, from 4.9% in the first quarter to 4.7%. This positive trend is expected to continue and is expected to increase 4.5% in the second quarter.
If Tuesday’s employment data is strong, the New Zealand dollar may get the boost it needs to rally in 70 territories. More importantly, the Bank of New Zealand will almost certainly raise interest rates. The huge CPI reading of 1.3% in July raised the annual inflation rate to 3.3%, causing expectations of interest rate hikes to skyrocket. After the CPI was released, Westpac sent out a report that the August rate hike was set at 90%.
Technical outlook of New Zealand Dollar
The NZDUSD has been trading higher after the RBA left the interest rate unchanged, giving its sister currency the Kiwi a boost.
The price has been failing to break the resistance trend and with the minor resistance (blue) formed the price has failed to break the areas. If the jobs report comes out stronger than expected we could see the price move higher and break the key level. On other hand, if the numbers miss expectations we could the price move further down to 0.69528.
Lulama Msungwa – Financial Market Analyst
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