- NZD/USD bears at bay as the markets move into consolidation ahead of the NFP.
- US jobs are in focus for the final day of the week.
NZD/USD is flat on the day as the markets move into a state of consolidation ahead of today's key event in the Nonfarm Payrolls, NFP. The pair have been whipsawed this week due to the US Federal Reserve's intent to continue hiking rates at a steep pace with a long way to go, according to the Fed Chairman, Jerome Powell. At the time of writing, the Kiwi is trading at 0.5770 and between a low of 0.5764 and a high of 0.5777.
''The Kiwi continued peeling off after yesterday’s hawkish Fed meeting and 75bp hike, having unwound the initial spike and more. The USD regained favour as US short end interest rates hit new cycle highs,'' analysts at ANZ Bank said, adding the following:
''As if there should have been any doubt, the Fed has made it clear that it’s up to the task of tackling inflation, and for the time being, that’ll likely keep playing into the USD’s favour, especially if risk appetite continues to tumble.''
''Although there are reasons to be optimistic on the NZD given the strength of the local economy and clear need for world-beating higher policy rates here, which adds carry appeal, that may only help on non-USD crosses (where some NZD outperformance has been seen).''
The day ahead
Meanwhile, today's NFP will be important, but perhaps not as critical as next week's Consumer Price Index nor what Fed speakers will have to say in speeches today. Analysts at Westpac explained that a slowdown in the jobs data is widely anticipated in October though the unemployment rate will likely remain little changed for now allowing for growth in average hourly earnings to remain robust. Boston Fed president Susan Collins will speak as well on Friday who has been an advocate for higher rates argued in prior statements that “it will be important to see clear and convincing signs that inflation is falling.”