NZD/USD retreats to 0.7050 from multi-week highs, looks to post daily gains
- NZD/USD changed its course after rising toward 0.7100.
- US Dollar Index consolidates daily gains above 92.00.
- Hawkish Fed commentary and upbeat ISM PMI data helped USD gather strength.
Boosted by the impressive labour market report from New Zealand, the NZD/USD pair rose sharply during the Asian trading hours on Wednesday and reached its highest level in nearly a month at 0.7089. With the USD starting to outperform its rivals in the American session, however, the pair erased a portion of its daily gains and was last seen rising 0.5% on the day at 0.7048.
The data published by Statistics New Zealand revealed that the Unemployment Rate in the second quarter declined to 4% from 4.6% in the first quarter. Additionally, the Employment Change arrived at +1%, compared to analysts' estimate for an increase of 0.7%.
USD capitalizes on Fedspeak, PMI data
On the other hand, the Automatic Data Processing (ADP) Research Institute reported that private-sector employment rose by 330,000 in the US. With this print missing the market expectation of 695,000 by a wide margin, the greenback struggled to attract investors.
Nevertheless, the impressive ISM Services PMI data, which notched a new all-time high of 64.1 in July, and hawkish Fed commentary helped the US Dollar Index (DXY) turn north.
Fed Vice Chair Richard Clarida said on Wednesday that the Fed could announce a moderation in asset purchases later in the year. Furthermore, Clarida noted that conditions could be met for a rate hike by the end of 2022. Following these remarks, the DXY touched a weekly high of 92.30 and was last seen consolidating its gains a little below that level.
Technical levels to watch for