The New Zealand dollar remained positive against its U.S. counterpart during the course of the session on Wednesday after posting a much better-than-expected employment data, while the Australian dollar plunged ahead of the most awaited Fed’s policy statement.
NZD/USD stood at 0.6936, posting below its one-week high of 0.6968 in overnight trading.
The Statistics New Zealand said on Wednesday that the number of employed people added 1.2% in the first quarter, topping analysts’ expected 0.8% rally after recording recent 0.8% gains in the last three months to December.
Conversely, the unemployment rate dropped 4.9% in the first quarter from 5.2% in the last quarter, bewildering expectations for a flat reading.
AUD/USD lost 0.62% to change hands at 0.7487.
Meanwhile, the dollar’s sentiment strengthened, led by the highly-anticipated Federal Reserve’s speech on monetary policy decision due later in the day.
Elsewhere in the interest rates, the central bank is widely expected to leave rates unchanged, which sent investors to keep an eye for further clues of a future rate hikes.
The U.S. dollar index, which gauges the dollar’s strength against a basket of major currency peers rose 0.14% at 98.91 in late trade.
Investors Remains Wary
The dollar loses its track from its six-week high after a disappointing US auto sales data in April announced on Tuesday, increasing worries over the outlook for the US economy after striking a soft patch in the first quarter.
Senior global market analyst Satoshi Okagawa said investors may trade with caution by actively buying the dollar against the yen.
"Concerns about geopolitical risks such as North Korea had weighed on the dollar against the yen recently... But the focus is shifting to whether the (strength) of US economic fundamentals is for real," he said.
Subsequently, the dollar surged against the yen last week as investor risk aversion shrank, buoyed partly by dampened concerns over geopolitical tensions.
"There is more data coming up including the jobs data, so those need to be watched closely," Okagawa said, referring to the US nonfarm payrolls report due on Friday.
The strong kiwi came in the midst of a rallying global dairy prices at an international auction, which is expected to give a huge impact in the New Zealand dollar as the dairy sector takes a large part of over 7 percent of the country’s gross domestic product (GDP).
The chart below illustrates NZD/USD performance amid positive employment data, following the highly-anticipated Federal Reserve’s speech on monetary policy decision. The pair is currently trading at 0.69665 in a light trading volume.
It shows a clear rebound on the pair and the RSI at 45.1264 suggests that it could definitely remain steady.
The New Zealand dollar may continue to rebound due to the increasing global dairy prices that is held at an international auction that consist of a large part of more than 7 percent of the country’s GDP.
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