- NZD/USD faces challenges as concerns over weakening oil demand rise amid decreasing odds of Fed rate cuts.
- The US NFP showed 147,000 new jobs added, while the Unemployment Rate declined to 4.1% in June.
- The RBNZ is widely anticipated to hold its cash rate steady at 3.25% next week.
NZD/USD remains subdued for the third successive session, trading around 0.6070 during the Asian hours on Friday. The pair depreciated as the US Dollar (USD) received support from stronger-than-expected US job growth and a surprise drop in the unemployment rate data, overshadowing investors’ hopes for a Federal Reserve (Fed) interest rate cut.
Traders also await clarity on US President Donald Trump’s plans for tariffs on various countries. Trump said late Thursday that he “will begin sending letters on trade tariffs starting Friday.” He told reporters that he would send letters to 10 countries at a time, laying out tariff rates of 20% to 30%, per Reuters.
The US Nonfarm Payrolls (NFP) report took the spotlight on Thursday, landing in a shortened trading week due to US Independence Day. However, markets seem more attuned to the broader trend, as political and fiscal uncertainties continue to weigh on investor sentiment.
NFP indicated that the US labor force grew by 147,000 jobs, surpassing the anticipated 110,000 in June. Additionally, the Unemployment Rate declined to 4.1% from 4.2%. Meanwhile, weekly Jobless Claims fell to 233,000, down from 237,000, reflecting a resilient US labor market.
US President Donald Trump’s “one, big, beautiful” tax bill passed the House of Representatives and was sent to him for signing into law. The legislation includes significant tax cuts designed to stimulate economic growth. Trump hailed the bill’s passage on Truth Social, calling it a “historic victory for American workers, families, and businesses.”
The Reserve Bank of New Zealand (RBNZ) is widely expected to hold its cash rate steady at 3.25% next week. However, investors continue to anticipate one or two additional 25 basis point cuts later this year, amid ongoing concerns about the economic impact of US tariffs.
