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NZ dollar holds below 0.5900 as US safe-haven demand returns
NZD/USD hovered near 0.5895 after US nonfarm payrolls showed a 23K job loss in July, while Middle East tensions and higher oil prices supported the dollar.
The New Zealand dollar kept trading just under 0.5900 versus the US dollar, with NZD/USD around 0.5895 and little change on the day, according to FXStreet. The pair consolidated below 0.5900 after pulling back from a recent monthly high.
FXStreet said the US dollar initially weakened after disappointing US employment data, with the July Nonfarm Payrolls report showing the US economy unexpectedly lost 23K jobs and the prior month revised sharply lower to 20K additions from 57K first reported. That pointed to a cooling labor market and reduced expectations for tighter Fed policy, but the dollar’s downside reaction faded.
The outlet attributed the dollar’s later rebound to revived safe-haven demand tied to geopolitical tensions in the Middle East, including uncertainty around the Strait of Hormuz and attacks by Iran-backed Houthi militants on Saudi energy infrastructure. It also cited higher oil prices lifting concerns about energy-driven inflation, which could keep US policy restrictive for longer or prompt renewed rate hikes.
FXStreet added that weaker Chinese inflation data weighed on the kiwi, with China’s CPI slowing to a six-month low in July and its PPI easing more sharply than expected. Even so, the downside in NZD/USD was limited by the Reserve Bank of New Zealand’s hawkish, restrictive bias, and investors were set to watch upcoming US inflation data for clues on the Fed’s rate path.