NZD/USD steadies above 0.7100 after renewing multi-month highs
- NZD/USD capitalized on risk flows in the American session.
- US Dollar Index looks to close below 92.30.
- Eyes on US Nonfarm Payrolls data for August.
The NZD/USD pair extended its rally during the American trading hours on Thursday and reached its highest level since early June at 0.7120 before going into a consolidation phase. As of writing, the pair was up 0.6% on the day at 0.7110.
USD selloff remains intact ahead of NFP data
The positive shift witnessed in market sentiment provided a boost to the risk-sensitive in the second half of the day while making it difficult for the greenback to find demand.
Reflecting the broad-based USD weakness, the US Dollar Index remains on track to post its lowest daily close in nearly a month below 92.30. On the other hand, the S&P 500 Index is sitting at the new record high it set at 4,545 after the opening bell.
Earlier in the day, the data from the US revealed that the Initial Jobless Claims declined to 340,000 in the week ending August 28, compared to analysts' estimate of 345,000. Moreover, Challenger Job Cuts in August slumped to the lowest level since 1997 at 15,723.
On Friday, the US Bureau of Economic Analysis will release the August jobs report. Investors expect Nonfarm Payrolls to rise by 750,000 in August following July's impressive print of 943,000.
Previewing this data, "the most significant statistic for the Federal Reserve's critical September decision is August's Nonfarm Payrolls, and a mix of exaggerated low expectations and overstretched dollar shorts could trigger a big bounce," said FXStreet analyst Yohay Elam.
NFP Preview: How low can the dollar go? Extremely low expectations point to a greenback comeback.
Technical levels to watch for