NZD/USD consolidates weekly losses around 0.7750 ahead of US jobs report
- NZD/USD posts modest recovery gains following Thursday's sharp decline.
- US Dollar Index stays relatively calm around 90.50.
- Focus shifts to May Nonfarm Payrolls report from US.
The NZD/USD pair lost 100 pips on Thursday and touched its lowest level in three weeks at 0.7126. Ahead of key macroeconomic data releases on Friday, the pair is staging a technical correction and was last seen rising 0.2% on the day at 0.7157.
Eyes on US NFP data
The renewed USD strength on Thursday caused NZD/USD to fall sharply. The upbeat macroeconomic data from the US and surging US Treasury bond yields provided a boost to the greenback and the US Dollar Index gained 0.65% on a daily basis.
The ISM Services PMI and the Markit Services PMI both climbed to new series highs in May and the Automatic Data Processing (ADP) Research Institute reported that the private sector employment rose by 978,000, compares to analysts' estimate of 650,000.
Later in the day, the US Bureau of Economic Analysis (BEA) will publish the May jobs report. Investors expect Nonfarm Payrolls to increase by 650,000 following April's disappointing print of 266,000. Market participants will keep a close eye on the Average Hourly Earnings data as well. Revived inflation concerns this week fueled a rally in the benchmark 10-year US T-bond yield and a similar market reaction is likely to help the USD to continue to gather strength ahead of the weekend.
US Nonfarm Payrolls May Preview: Questions, questions needing answers.
US May Nonfarm Payrolls Preview: Analyzing major pairs' reaction to NFP surprises.
Technical levels to watch for