NZD/USD Fluctuates Higher To Around 0.6200

NZD/USD strengthened to around 0.6195 in early Asian trading on Friday. Speculations about the Fed’s rate cut this year continue to heat up, and the weak US dollar continues to support NZD/USD. Later on Friday, the market may become cautious before the release of the highly anticipated US non-farm payrolls (NFP) data for May.

Weak US economic and labor market data this week have increased expectations of a September rate cut by the Federal Reserve. The number of initial jobless claims in the United States for the week ending May 31 increased by 8,000 from the previous value of 221,000 to 229,000. This figure is higher than the expected value of 220,000. At the same time, the four-week average of initial jobless claims rose from 210,000 last month to 222,000, close to the highest level in nine months. On Wednesday, US ADP employment data showed that the United States added 152,000 net jobs, lower than the previous value of 188,000.

Nearly two-thirds of economists in a Reuters poll conducted between May 31 and June 5 now expect the Fed to cut interest rates in September. The U.S. non-farm payrolls report for May will be closely watched, with the economy expected to add 185,000 jobs in May. A lower-than-expected non-farm payrolls report could increase speculation of a Fed rate cut and weigh on the dollar against the New Zealand dollar.

China’s economic data has been positive, with the New Zealand dollar/dollar rising recently as China is New Zealand’s main trading partner. China’s services purchasing managers’ index rose to 54.0 in May from 52.5 in April, higher than the expected value of 52.6, according to Caixin data released on Wednesday.

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