The New Zealand Dollar (NZD) remains relatively stable against the US Dollar (USD) as traders await the release of the crucial US Nonfarm Payrolls (NFP) report. The USD is experiencing a recovery, driven by rising US Treasury yields and increased jobless claims. The NZD, on the other hand, faces pressure from global uncertainties and expectations of an RBNZ interest rate cut.
The NZD/USD currency pair remains relatively stable on Friday, hovering around 0.5680 during European trading hours. This follows losses registered in the previous session as traders adopt a cautious stance ahead of the highly anticipated US Nonfarm Payrolls (NFP) release on Friday. The NFP data is expected to significantly influence the Federal Reserve 's (Fed) monetary policy direction in the coming months.
The US Dollar (USD) is currently experiencing a recovery, bolstered by rising US Treasury yields. The US Dollar Index (DXY) has climbed towards 107.70, while the 2-year and 10-year US Treasury yields stand at 4.22% and 4.44%, respectively. Adding to the USD's strength, US Initial Jobless Claims rose to 219K for the week ending January 31, surpassing initial estimates of 213K and exceeding the previous week's revised figure of 208K.Meanwhile, the risk-sensitive New Zealand Dollar (NZD) is facing headwinds due to heightened global trade and economic uncertainties. This risk aversion is compounded by expectations of a 50 basis point interest rate cut by the Reserve Bank of New Zealand (RBNZ) in February. Markets are currently assigning a 92% probability to this rate reduction, marking the third consecutive jumbo cut. However, potential tariff rollbacks resulting from trade negotiations between the United States and China could provide some support to the NZD.
NZD/USD US Dollar New Zealand Dollar Nonfarm Payrolls Federal Reserve Reserve Bank Of New Zealand US Treasury Yields Interest Rates Risk Sentiment Trade Negotiations
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