- NZD/USD extends its downside above 0.5900 amid the cautious mood and USD demand.
- US JOLTS Job Openings came in above expectations.
- The Reserve Bank of New Zealand (RBNZ) is likely to hold the rate unchanged at 5.50% at its October meeting.
- Traders await the RBNZ rate decision on Wednesday.
The NZD/USD pair remains on the defensive above the 0.5900 area during the early Asian session on Wednesday. Markets turn cautious ahead of the Reserve Bank of New Zealand (RBNZ) monetary policy meeting, with no change expected. The pair currently trades around 0.5906, losing 0.03% on the day.
The US Bureau of Labor Statistics (BLS) revealed in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday that the number of job openings for August stood at 9.6 million from 8.9 million (revised from 8.8 million) in the previous month. The figure came in better than the expectation of 8.8 million by a wide margin. Following the upbeat data, the US Dollar (USD) surged above 107.34 while US Treasury yields traded higher. The 10-year yield reached 4.80%, the highest since 2007.
On Tuesday, Cleveland Federal Reserve President Loretta Mester stated that she is likely to favor an interest rate hike at the next meeting if the current economic situation holds while mentioning that the Fed is likely at or near peak for interest rate target. Meanwhile, Atlanta Fed President Raphael Bostic said he will be patient and there is an urgency for us to do anything more. That said, the better-than-expected US economic data, higher yield, and cautious mood in the market lift the Greenback against its rivals and act as a headwind for the NZD/USD pair.
On the Kiwi front, RBNZ is likely to maintain the key interest rate unchanged at 5.50% for the fourth straight time on Wednesday. According to the interest rate market, the probability of a rate hike in October is approximately 10% and rises to over 50% for the meeting in November. However, the hawkish comments from the statement might limit the New Zealand Dollar's (NZD) downside.
Market participants will closely watch the Reserve Bank of New Zealand (RBNZ) Interest Rate Decision on Wednesday. Later on the day, the attention will shift to the US ADP Employment Change and ISM Services PMI. On Friday, the highly-anticipated US Nonfarm Payrolls will be released.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0500, looks to post weekly losses
EUR/USD extended its daily decline toward 1.0500 in the second half of the American session, pressured by the souring market mood. Despite the bullish action seen earlier in the week, the pair remains on track to register weekly losses.
GBP/USD falls below 1.2150 as USD rebounds
Following an earlier recovery attempt, GBP/USD turned south and declined below 1.2100 in the second half of the day on Friday. The negative shift seen in risk mood amid rising geopolitical tensions helps the US Dollar outperform its rivals and hurts the pair.
Gold advances to fresh multi-week highs above $1,920
Gold extended its daily rally and climbed above $1,920 for the first time in over two weeks on Friday. Escalating geopolitical tensions ahead of the weekend weigh on T-bond yields and provide a boost to XAU/USD, which remains on track to gain nearly 5% this week.
Bitcoin could be an alternative to US-listed companies but not in the short term
Bitcoin has dipped below $27,000, adding to the subdued cryptocurrency market sentiment. While short-term price concerns persist, analysts predict a rebound based on historical figures.
Nvidia Stock Forecast: NVDA slips as Biden administration attempts to close AI chip loophole
Nvida's stock price opened marginally lower on Friday after Reuters reported that the Biden administration is attempting to close a loophole that allowed Chinese companies access to state-of-the-art computer chips used for AI.