NZD/USD surges above 0.6050 amid US Dollar weakness NZDUSD
The Kiwi gained more than 80 pips in Thursday's session and jumped to a daily high of 0.6075.Fed’s Harker dovish comments also seems to be putting pressure on the US Dollarpair set its biggest daily gains since mid-May. In that sense, the combination of weak ISM data, downward revision on the Unit Labor Costs and Fed’s Patrick Harker dovish remarks contributed to the selling pressure of the Greenback.
from New Zealand remains empty, the Kiwi also benefits from the positive market environment fueled by the passing of the US debt-ceiling limit bill by the US House of Representatives. The US Bureau of Statistics, reported that the Unit Labor Costs in Q1 increased by 4.2%, which was revised down from the initial estimate of 6.3%. Moreover, the Institute for Supply Management reported that the Manufacturing PMI for May was 46.
As a result, with the US economic activity showing signs of weakness ahead of the upcoming June 13-14 FOMC meeting, markets are now discounting higher chances of a pause. As a reaction, the US bond yields are falling. The 10-year bond yield retraced to 3.61% and showed a 1.03% decline while 2 and 5-year rates also experienced declines of more than 1% standing at 4.33% and 3.
. Adding to that, Fed's Patrick Harker commented ”I think we should at least skip raising rates in June” and that if inflation notably decelerates, then the Fed can start to cut rates. for May show a deceleration in job creation in the US private sector, dropping to 190k from the previous figure of 253k. Hourly earnings are projected to remain stagnant at 0.4%, while the unemployment rate is expected to experience a slight increase, reaching 3.5%.
If the Kiwi retakes its downside path, immediate support levels are seen at the 0.60 zone, followed by the 0.5995 area and the 0.5990 zone. Furthermore, resistances line up at the 0.6070 area, followed by the 0.6090 zone and the 0.6100 psychological mark.
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