- The bird was under pressure overnight, but bulls are back in town in Asia.
- The US dollar is back under pressure ahead of the NFP.
NZD/USD is currently trading at 0.6707 between a session range of between 0.6688 and 0.6711 as the US dollar gives back more gains as markets get set for the US jobs numbers later today.
The bird lost almost 1% to 0.6705 overnight as risk appetite falls away while US stocks take a turn for the worst.
The tech sector was flushed out in the big names taking a reign check after months of unprecedented gains.
Analysts at ANZ Bank said that picking the timing of swings like this is near impossible, but it was always on the cards, given the accelerating rate of change seen in some key US stock indices.
We’re not equity analysts, but key drivers like excess liquidity, the rebound thematic and low-interest rates are still supporting risk-taking, suggesting it is more likely to be a correction than the end of the road.
Meanwhile, the RBNZ Governor has recently been making it very clear that the central banks wants looser monetary policy, and that rates could go negative.
Eventually we do expect a collection of RBNZ policy settings that will ultimately undermine the NZD, but for now the market is keen to continue to play chicken with calls for a lower Kiwi,
the analysts at ANZ Bank added.
Fo the day ahead, it is that time again – Nonfarm Payrolls
Both the ISM employment indexes and ADP print point to downside risks for nonfarm payrolls in August (prior: 1763k, market f/c: 1350k, Westpac f/c: 1300k). As of July, non-farm payrolls were still almost 13 million below the February peak.
Unemployment will remain elevated for some time; Westpac and the market forecast 10.0% and 9.8% in August (prior: 10.2%). And downward pressure will remain on average hourly earnings (prior: 0.2%, market f/c: 0.0%),