NZD/USD rebounds from 0.5800, downside still solid on Fed-infused volatility, US NFP eyed – by Sagar_Dua24 NZDUSD Fed Inflation DollarIndex RiskAversion
ratesAfter a bloodbath, S&P500 has witnessed a pause in the downside momentum, however, the pessimism is still high as corporate would require to come forward with lower earnings guidance and impact on net profit margins due to the fourth consecutive 75 basis points by the Fed. Meanwhile, the USCiting inflationary pressures as responsible for a bigger rate hike, Fed chairhas also provided hawkish guidance.
This week, the US Nonfarm Payrolls data will be of utmost importance. The US NFP is seen lower at 200k vs. the prior release of 263k. While the jobless rate will increase to 3.6% from the former print of 3.5%. Employment generation in the US economy is increasing but at a diminishing rate that could compel the Fed in the Decembermeeting to slow down its pace of hiking interest rates. Also, lower consumer spending could de-rail the 75-bps rate hike spell.
On the NZ front, investors will keep an eye on Caixin Services PMI data. The economic data is likely to bring adjustment in the asset as NZ is a leading trading partner of China, therefore Chinese services activities have a significant impact on kiwi dollar.
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