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NZD remains close to one-week top vs USD; looks to US NFP for fresh impetus

  • NZD/USD attracts some dip-buyers and remains close to a one-week top, set on Tuesday.
  • Fed rate hike bets, along with geopolitical risks, should support the USD and cap the pair.
  • Traders might also refrain from placing aggressive directional bets ahead of the US NFP.

The NZD/USD pair edges higher following the previous day’s two-way price moves and trades around the 0.5685 region during the Asian session on Friday. Spot prices, however, remain below a one-week high, touched on Tuesday, as traders keenly await the US monthly employment details for a fresh impetus.

The popularly known US Nonfarm Payrolls (NFP) report is a crucial driver of the Federal Reserve’s (Fed) monetary policy and play a key role in influencing the US Dollar (USD) demand. Stronger data will reaffirm a resilient US labor market and bolster rate hike bets, while a dismal print would temper expectations for a more hawkish Fed. Nevertheless, the crucial report should help investors to evaluate the timing and likelihood of future interest rate changes, which, in turn, will determine the near-term trajectory for the buck and the NZD/USD pair.

Heading into the key data risk, traders have been pricing in around a 64% chance that the US central bank will raise borrowing costs in September and assigning a nearly 85% probability of a move by the end of this year amid sticky inflation. The bets were lifted by data, showing that consumer inflation accelerated to a three-year high in May. Moreover, several Fed officials also indicated that higher interest rates may be necessary to bring inflation back to the central bank’s 2% target. This, to a larger extent, offsets Wednesday’s unimpressive US data.

The US ADP report revealed that private-sector employment increased by 98K in June, down from the previous month’s unrevised 122K and missing consensus estimates for a reading of 113K. Adding to this, the ISM Manufacturing PMI eased to 53.3 in June from 54 in the previous month. The data, however, does little to dent the underlying USD bullish sentiment amid hawkish Fed expectations. Apart from this, geopolitical risks support the safe-haven USD and warrants caution before positioning for a further appreciating move for the NZD/USD pair.

Iran and the US concluded a round of indirect talks in Qatar with no sign that they had made headway toward lasting peace amid tensions over the critical Strait of Hormuz. Separately, Russia launched a barrage of missiles and drones on Ukraine’s capital, Kyiv, early Thursday. This keeps geopolitical risks in play, which favors the USD bulls and should cap the NZD/USD pair. However, the Reserve Bank of New Zealand’s (RBNZ) hawkish shift might hold back traders from placing aggressive bearish bets around the New Zealand Dollar (NZD).

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GBP gathers strength to near 1.3300 on Burnham’s commitment to fiscal rules, NFP data loom

  • GBP/USD attracts some buyers to around 1.3290 in Thursday’s Asian session.
  • Burnham’s commitment to fiscal rules calms traders’ nerves, supporting the British Pound.
  • The US jobs data for June will be in the spotlight later on Thursday.

The GBP/USD pair gains traction to near 1.3290 during the Asian trading hours on Thursday. The British Pound (GBP) strengthens against the US Dollar (USD) as the UK’s likely next Prime Minister, Andy Burnham, has eased market concerns by pledging strict fiscal discipline. The US Nonfarm Payrolls (NFP) data for June will take center stage later on Thursday.

Burnham vowed on Monday to deliver radical change to the nation’s politics by handing more power to its regions and by encouraging collaboration over argument in a 10-year mission to spur “good” growth. Traders continue to assess the political transition in the UK following Burnham’s emergence as the next leader.

Natixis analysts believe that maintaining investor confidence in the UK’s public finances will be critical. While Burnham’s commitment to fiscal discipline offers near-term support, markets will closely monitor future budgets for any signs that fiscal rules are being relaxed to finance higher public spending.

All eyes will be on the US jobs data later in the day as it could offer some hints about the US interest rate path. The US Nonfarm Payrolls (NFP) is expected to show 110,000 job additions in June, while the Unemployment Rate is projected to hold steady at 4.3% during the same period. Any signs of a resilient US labor market could lift the Greenback and act as a headwind for the major pair.

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Australian dollar holds ground vs Japanese Yen amid May Trade Deficit

  • AUD/JPY remains calm following missing domestic trade data expectations.
  • Australia’s Trade Balance shifted to a A$3,018M deficit in May, reversing April’s surplus.
  • The Japanese Yen may receive support amid the potential for government intervention.

AUD/JPY remains flat after recovering daily losses, trading around 112.10 during the Asian hours on Thursday. The currency cross held its ground as the Australian Dollar (AUD) showed resilience, even after domestic trade data significantly missed market expectations.

According to the Australian Bureau of Statistics (ABS), the Trade Balance unexpectedly swung into a deficit of A$3,018 million in May, a sharp reversal from the previous month’s revised surplus of A$1,383 million. This fell well short of the market consensus, which had anticipated a surplus of A$2,200 million. The downturn was primarily driven by a 6.9% month-on-month plunge in exports, compounded by a 2.6% increase in imports.

The AUD/JPY cross moves little as the Japanese Yen (JPY) remains under intense pressure despite mounting evidence that the Bank of Japan (BoJ) may continue normalizing its monetary policy. Japan’s latest Q2 Tankan Large Manufacturing Index climbed to 22 from 17 prior, the highest level in eight years, strengthening the case for further interest rate hikes later this year.

The JPY continues to languish near its weakest level against the US Dollar (USD) in four decades. This prolonged weakness has kept traders on high alert for potential government intervention, which could put downward pressure on the AUD/JPY cross, especially ahead of a US public holiday when thinner market liquidity could magnify the impact of any official action. Reinforcing this caution, Finance Minister Satsuki Katayama reiterated warnings that authorities stand ready to respond appropriately to currency market developments at any time.

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United States Dollar Index trades subduedly around 101.35 ahead of US NFP data

  • The US Dollar Index edges down to near 101.35 ahead of the US NFP data for June.
  • Investors will closely track the US Average Hourly Earnings data to get fresh cues regarding the inflation outlook.
  • The Fed is almost certain to deliver at least one interest rate hike this year.

The US Dollar (USD) reflects a subdued performance in the countdown to the United States (US) Nonfarm Payrolls (NFP) data for June, which will be published at 12:30 GMT.

At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower to near 101.35.

Investors will pay close attention to the US NFP data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook. The US NFP report is expected to show that the economy created 110K fresh jobs, lower than 172K in May. The Unemployment Rate is seen remaining steady at 4.3%.

Average Hourly Earnings, a key measure of wage growth, is estimated to arrive higher at 3.5% Year-on-Year (YoY) from 3.4% in May, with monthly figures rising steadily by 0.3%.

The impact of the US NFP report, especially the Average Hourly Earnings data, will be significant on the Fed’s interest rate expectations, as Chair Kevin Warsh warned at the European Central Bank (ECB) Forum in Sintra on Wednesday that inflation remains “too high”, while stressing the need to bring price stability. As expected, Warsh didn’t offer any cues regarding the Fed’s future decisions on interest rates.

Meanwhile, the CME FedWatch tool shows an almost 85% chance that the Fed will deliver at least one interest rate hike.

On Wednesday, both the US ADP Employment Change and the ISM Manufacturing PMI data for June missed estimates. The ADP report showed that the private sector created 98K fresh jobs, lower than the estimates of 113K. The Manufacturing PMI arrived lower at 53.3, while it was expected to remain steady at 54.0.

Warsh rejects forward guidance but doubles down on 2% inflation goal

Fed Chair Warsh delivers a moderately hawkish message, with a FXS Speechtracker score of 5.6/10 that cannot be benchmarked relative to the historical average but still signals a clear focus on price stability. The refusal to provide forward guidance, coupled with the assertion that the Central Bank must judge whether the AI boom is inflationary and the insistence that anyone expecting comfort with inflation above 2% will be disappointed, underscores a data-dependent, independence-focused stance that keeps the Dollar supported while acknowledging AI as a potential macro game-changer. Warsh’s characterization of steady labor markets, a solid supply side, and declining inflation expectations and risks frames the current environment as one where the Fed can “chart a new course” without relaxing the 2% target.

The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-hawkish level of 123.64, confirming that the speech did not materially shift the broader policy tone captured by the FXS Speechtracker. With the index firmly above 100, the Fed remains in hawkish territory, and the lack of movement suggests markets largely anticipated Warsh’s emphasis on independence, price stability, and cautious engagement with the AI-driven economic backdrop.

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EUR/JPY Price Forecast: Edges lower below 185.00, while near-term bullish bias holds

  • EUR/JPY posts modest losses near 184.95 in Thursday’s early European session.
  • The cross keeps a bullish near-term tone, but further consolidation cannot be ruled out amid neutral RSI momentum.
  • The first upside barrier is seen at 185.00; the initial support level to watch is 184.90.

The EUR/JPY cross trades on a negative note around 184.95 during the early European session on Thursday. Eurozone inflation fell more than expected in June, easing pressure on the European Central Bank (ECB) to raise rates at its next meeting on July 23. This, in turn, could weigh on the Euro (EUR) against the Japanese Yen (JPY).

Data released by Eurostat on Wednesday showed that Eurozone inflation, as measured by the Harmonized Index of Consumer Prices (HICP), dropped to 2.8% YoY in June from 3.2% in May. This figure came in below the consensus of 3.0%.

Morgan Stanley economists said softer Eurozone June inflation could also “lower the bar a touch for the ECB to be on hold in September,” adding that energy pressures likely had a “limited” direct impact on eurozone prices.

Following Wednesday’s print, traders continued to anticipate the ECB to deliver another quarter-point rate rise by the end of this year, according to Morningstar.

Chart Analysis EUR/JPY

Technical Analysis:

In the daily chart, EUR/JPY holds above the Bollinger Bands middle line and the 100-day moving average, keeping a mildly bullish near-term tone as price gravitates near recent highs. The Relative Strength Index (14) hovers around 50, suggesting balanced momentum and favoring a continuation of range-bound gains rather than an impulsive breakout.

On the topside, immediate resistance is located at the 185.00 psychological level, en route to the June 30 high of 185.86. The next hurdle emerges at the Bollinger Bands upper band near 186.15, where bullish attempts could meet profit-taking. 

On the downside, initial support is seen at the Bollinger middle band at 184.90, followed by the 100-day moving average at 184.65; a deeper pullback would expose the lower Bollinger band support around 183.65.

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Swiss Franc declines ahead of Swiss Real Retail Sales, SVME PMI data

  • USD/CHF holds gains as the US Dollar remains stronger amid escalating geopolitical friction.
  • The CME FedWatch tool shows fed funds futures are pricing in a nearly 63% chance of a September rate hike.
  • Switzerland’s June KOF Economic Barometer beat expectations, climbing to a four-month high of 101.2 from May’s revised 98.6.

USD/CHF gains ground for the second consecutive day, trading around 0.8090 during the Asian hours on Wednesday. Traders will likely observe the upcoming Swiss Real Retail Sales and SVME Purchasing Managers’ Index (PMI) data due later in the day.

The USD/CHF pair appreciates as the US Dollar (USD) gains ground on safe-haven demand tied to escalating geopolitical friction. Uncertainty is clouding the US-Iran Doha peace talks after US negotiators Jared Kushner and Steve Witkoff arrived in Qatar to meet with mediators. Tehran’s subsequent announcement that it will not meet directly with the US envoys has dimmed prospects for a swift or lasting resolution, keeping geopolitical risk premiums alive and well in the market.

Simultaneously, the Greenback is drawing immense strength from rising hawkish sentiment surrounding the Federal Reserve’s policy outlook. At its June meeting, the Fed held its benchmark interest rate steady at a target range of 3.50% to 3.75% while notably removing previous language that hinted at future rate cuts. Reflecting this hawkish shift, the CME FedWatch tool shows that fed funds futures are now pricing in a nearly 63% chance of an interest rate hike by September.

Looking ahead, market momentum is expected to accelerate during the US session as traders digest major upcoming catalysts. Immediate focus is on Federal Reserve Chairman Kevin Warsh’s appearance at the ECB Forum in Sintra, alongside Wednesday’s releases of the ADP private employment report and the ISM Manufacturing PMI. Following these events, market attention will shift entirely to Thursday’s crucial Nonfarm Payrolls (NFP) monthly jobs report, which will likely dictate the next major leg for the Dollar.

On Tuesday, Switzerland’s KOF Economic Barometer climbed to 101.2 in June from an upwardly revised 98.6 in May, hitting a four-month high and easily beating the market consensus of 98.2. This robust reading signals a stronger domestic economy, reducing the pressure on the Swiss National Bank (SNB) to cut interest rates to stimulate growth. Because steady or higher interest rates attract global investors looking for yield, demand for the Swiss Franc (CHF) may emerge.

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USD/JPY Price – Extends rally to near 162.70 amid soaring US bond yields

  • USD/JPY rises to near 167.73 as US Treasury Yields soar, following upbeat US JOLTS Job Openings data.
  • Investors shift their focus to the US ADP Employment Change and the ISM Manufacturing PMI data for June.
  • Japan’s officials have signaled that they are ready to intervene to support the Yen.

The USD/JPY pair trades 0.1% higher to near 162.73 during the European trading session on Wednesday. The pair reflects strength as surging United States (US) Treasury Yields have strengthened the US Dollar (USD).

In the European trade, 10-year US Treasury Yields are up 0.18% to 4.47%, extending Tuesday’s little over 2% gains. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is up 0.16% to near 101.33.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.12%0.14%0.08%0.10%0.36%0.02%0.05%
EUR-0.12%0.02%-0.04%-0.01%0.26%-0.11%-0.05%
GBP-0.14%-0.02%-0.06%-0.03%0.22%-0.13%-0.05%
JPY-0.08%0.04%0.06%0.00%0.29%-0.09%-0.01%
CAD-0.10%0.01%0.03%-0.01%0.27%-0.11%-0.02%
AUD-0.36%-0.26%-0.22%-0.29%-0.27%-0.37%-0.29%
NZD-0.02%0.11%0.13%0.09%0.11%0.37%0.09%
CHF-0.05%0.05%0.05%0.01%0.02%0.29%-0.09%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

US bond yields are soaring due to signs of improving US job market conditions. On Tuesday, the US JOLTS Job Openings data for May arrived at 7.594 million fresh jobs, higher than 7.3 million estimates and the previous reading of 7.585 million.

Meanwhile, investors await the US ADP Employment Change and the ISM Manufacturing PMI data for June, which will be released during the North American session.

On the Tokyo front, investors expect the Japanese administration to intervene anytime soon to support the falling Japanese Yen (JPY). On Tuesday, Japan’s Chief Cabinet Secretary Minoru Kihara said that the administration is always ready to take necessary action on Forex; however, he didn’t deliver any comments regarding specific FX levels.

USD/JPY technical analysis

USD/JPY trades higher at around 162.73, extending its bullish bias as spot holds well above the 20-day exponential moving average (EMA) at 161.19. The overall trend of the pair is bullish, following the breakout of the Rising Channel formation.

The Relative Strength Index (RSI) at 78.45 sits deep in overbought territory, suggesting upside momentum remains strong but also warns that the pair could be vulnerable to bouts of corrective pullback even within the broader uptrend.

On the downside, immediate support is seen at the Rising Channel breakout region near 161.75, followed by the 20-day EMA near 161.19. Looking up, the pair could extend the rally towards 163.00 and 164.00.

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EUR/USD Price – Weakens to near 1.1400 as ECB hike bets recede, bearish vibe prevails

  • EUR/USD weakens to around 1.1410 in Wednesday’s early European session.
  • The negative outlook of the major pair remains intact below the 100-day SMA, with bearish RSI momentum.
  • The immediate resistance level is seen at 1.1485; the first downside target to watch is 1.1320.

The EUR/USD pair trades on a negative note near 1.1410 during the early European trading hours on Wednesday. Cooling inflation in Germany has lowered expectations for the European Central Bank (ECB) rate hikes, weighing on the Euro (EUR) against the US Dollar (USD).

Germany’s Consumer Price Index (CPI) inflation fell to 2.3% in June, down from 2.6% in May, according to Destatis on Tuesday. This figure came in softer than the market expectations of 2.5%. ECB President Christine Lagarde last week said that there was no need for “forceful” action, citing falling energy prices and the lack of “second-round” effects like higher wage demands that could further stoke inflation.

Traders brace for the preliminary reading of the Harmonized Index of Consumer Prices (HICP) from the Eurozone. In case of hotter-than-expected outcomes, this could lift the shared currency in the near term.

On the US docket, the ADP Employment and ISM Manufacturing Purchasing Managers Index (PMI) reports will be published later on Wednesday. All eyes will be on the Nonfarm Payrolls (NFP) data on Thursday, which is expected to show 111,000 job additions in June.

Chart Analysis EUR/USD

Technical Analysis:

In the daily chart, EUR/USD maintains a bearish near-term tone as it holds below the 20-day Bollinger simple moving average (SMA) and the 100-day moving average (MA). The pair is drifting near the lower half of the recent Bollinger envelope, while the 14-period Relative Strength Index (RSI) around 36 suggests weak, still-negative momentum rather than an immediate oversold condition.

On the topside, initial resistance is seen at the 20-day Bollinger SMA near 1.1485, followed by the 100-day MA around 1.1632 and the upper Bollinger band close to 1.1650, which together outline a dense supply zone capping recovery attempts. On the downside, the June 29 low of 1.1381 acts as the next notable support. Any follow-through selling below this level could expose further weakness toward lower Bollinger band at approximately 1.1320, followed by the 1.1300 psychological level.