Yesterday, the Kiwi dollar and the greenback were stuck in a range, following the release of weak economic data from New Zealand and the United States. While New Zealand’s employment unexpectedly declined, the US JOLTS job openings data missed estimates. The NZD/USD pair generally moved within a small range of 0.5873 and 0.5902 in the past 24 hours.
As stated by Statistics New Zealand, the country’s employment fell by 0.20% q-o-q in the March 2024 quarter following a 0.40% increase in the previous quarter and missed forecasts of a 0.30% rise.
Correspondingly, the unemployment rate stood at 4.30% at the end of 1Q 2024, a few notches higher than the 4% recorded in the December 2023 quarter, but in line with economists’ estimates.
The underutilization rate increased to 11.20% in the March 2024 quarter from 10.70% in the December 2023 quarter. The employment rate declined to 68.40% from 69%.
Furthermore, the labor force participation rate inched down to 71.50% from 71.90%.
According to the data published by the ADP Research Institute, US non-farm payrolls rose by 192,000 in April following an addition of 208,000 jobs in the previous month, surpassing forecasts of 179,000 job additions.
The goods-producing sector added 45,000 jobs. Specifically, the construction sector added 35,000 jobs.
The service-providing sector added 147,000 jobs. In particular, the trade, transportation, and utilities sectors added 26,000 jobs. Likewise, professional and business services added 22,000 jobs. Similarly, the financial activities sector added 16,000 jobs. Also, the leisure/hospitality sector added 56,000 jobs, while the education/health services sector added 26,000 jobs.
In terms of company size, small firms added 38,000 jobs. Medium and large enterprises added 62,000 and 98,000 jobs, respectively.
The ISM manufacturing PMI (purchasing managers’ index) for the US inched down to 49.20 in April from 50.30 in the previous month, missing forecasts of 50. A reading below 50 indicates contraction, and vice versa. Notably, the March reading reflected the first expansion in 16 months.
The index representing fresh orders fell to 49.10 in April from 54.10 in March. The production index eased to 51.30, albeit reflecting expansion, from 54.60. Furthermore, the backlog of orders index inched down to 45.40 in April from 46.30 in March, reflecting the 19th consecutive month of a decrease in unfulfilled orders.
According to Job Openings and Labor Turnover Survey (JOLTS) data published by the US Bureau of Labor Statistics, the number of job openings was 8.49 million in March, a slight decrease from 8.81 million in the previous month. Economists were anticipating 8.68 million openings. In March 2023, the number of US job openings stood at 1.10 million.
The number of job openings in the construction sector declined by 182,000. Likewise, the finance and insurance sectors lost 158,000 jobs. However, jobs in the state and local government education sectors increased by 68,000.
The weak economic data from both countries is expected to keep the NZD/USD pair range-bound in the near term.
The historical price chart indicates that the NZD/USD pair is descending after failing to break the resistance at 0.5980. The next major support is anticipated to be only near 0.5800. Additionally, the currency pair is trading below its 50-day moving average, while the stochastic indicator is in the bearish zone. Therefore, we anticipate the NZD/USD pair to remain in a downtrend soon.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
