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NZD/USD fluctuates in tight range above 0.6600 ahead of NFP

  • US Dollar Index stays near 97.50 ahead of key employment data.
  • Nonfarm Payrolls in US is expected to come in at 164K in December.
  • Broad AUD strength helps NZD stay resilient on Friday.

The NZD/USD pair rose modestly during the Asian trading hours but erased its gains as with the market action turning subdued ahead of the critical labour market data from the United States. As of writing, the pair was virtually unchanged on a daily basis at 0.6615.

The data published by Statistics New Zealand on Friday showed that Total Filled Jobs in November rose to 2.21 million from 2.16 million in New Zealand. Additionally, the AUD/USD pair rose sharply after Retail Sales in Australia rose 0.9% to beat the market expectation of 0.4% and helped the positively correlated NZD/USD pair cling to its gains.

Focus shifts to NFP

In the second half of the day, the US Dollar Index edged higher toward mid-97s ahead of the highly-anticipated Nonfarm Payrolls (NFP) data from the US and forced the pair to erase its gains. Markets expect the NFP to fall to 164,000 from November's impressive 266,000 reading and see the annual wage inflation staying unchanged at 3.1%.

Previewing the data, "we will look towards a 175K headline print. Also, we expect unchanged yearly wage growth of 3.1% with risks skewed towards a slight drop to 3.0%," said Danske Bank analysts. "While this overall is slightly stronger than consensus expectations we would expect but a modest positive market impact if this proves right.”

US NFP Preview: 8 Major Banks expectations from December payrolls report

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