The NZD/USD Consolidates Its Gains Near 0.5900 In Anticipation Of The US NFP Report

The NZD/USD pair consolidates gains on Friday during the early hours of Asian trading. As a result of a declining US Treasury bond yield and a weakened US Dollar, the pair recovers from its low of 0.5875 to approach the 0.5900 level. Nevertheless, market participants would rather remain on the sidelines in anticipation of Friday's US Nonfarm Payrolls (NFP). As of press time, the pair is trading at 0.5895, a decrease of 0.06% on the day.

The third-quarter unemployment rate in New Zealand increased from 3.6% to 3.9% on Wednesday. Employment appears to be approaching its maximal sustainable level, according to the data. The markets anticipate a 10% chance of an additional rate hike at the RBNZ's policy meeting in late November; conversely, a rate reduction could occur as late as August of the subsequent year.

The US Weekly Initial Jobless Claims increased to 217K from the previous reading of 212K, exceeding expectations for the USD. In contrast to expectations, the Unit Labour Cost for the third quarter (Q3) decreased by 0.8% from the previous reading's increase of 2.2%. In September, Factory Orders increased 2.8% month-over-month, surpassing market expectations.

The US Dollar (USD) did not appreciate in response to the positive economic data from the United States, as market participants are certain that the Federal Reserve (Fed) has concluded the tightening cycle. The probability of a rate hike occurring at the December meeting is below 20%, as indicated by the CME FedWatch Tool. Consequently, this causes a degree of strain on the USD.

Traders will subsequently derive additional signals from the forthcoming data. The US employment data is scheduled to be released on Friday. In October, the Nonfarm Payrolls (NFP) of the United States are projected to increase by 180K. It is anticipated that the unemployment rate will remain unchanged at 3.8%.