NZD/USD clings to modest gains above 0.6700 as focus shift to US NFP data
- NZD/USD recovered a small portion of Thursday's losses.
- US Dollar Index stays flat on the day near 92.80.
- Unemployment Rate in US is expected to drop below 10% in August.
The NZD/USD pair snapped a seven-day winning streak on Thursday and lost more than 60 pips. With the markets going into a consolidation phase ahead of the highly-anticipated Nonfarm Payrolls (NFP) data from the US, the pair is posting modest recovery gains near 0.6720.
Eyes on US labour market data
In the absence of significant macroeconomic data releases from New Zealand on Friday, the USD's market valuation remained the primary driver of NZD/USD's movements.
The US Dollar Index (DXY) posted gains for the third straight day on Thursday but struggled to hold above 93.00 as investors seem reluctant to keep their long USD positions while waiting for the NFP report. At the moment, the DXY is virtually unchanged on the day at 92.78.
Markets expect the Unemployment Rate in the US to drop to 9.8% with the NFP surging by 1.4 million. Previewing this data and its potential impact on the USD's performance, "upbeat numbers could boost the greenback, given its own momentum, despite it could also boost equities," said FXStreet chief analyst Valeria Bednarik. "A disappointing outcome, on the other hand, will be quite shocking at this point and spur some profit-taking ahead of the weekend."
NFP Preview: Eight major banks expectations for August jobs report.
Technical levels to watch for