The NZD/USD pair found support near the 0.5800 level during the Asian session on Thursday, attracting fresh buying interest and extending its winning streak to a fifth straight day. The pair is currently trading around 0.5825–0.5830, just shy of its weekly peak, as it builds on the rebound from last week’s lows—the weakest since April 10—amid broad US Dollar (USD) softness.
The US Dollar Index (DXY), which measures the Greenback against a basket of major currencies, is struggling to sustain its modest overnight recovery from a one-week low. Weakness stems from growing expectations that the Federal Reserve (Fed) will deliver two more rate cuts this year. These bets strengthened after Wednesday’s disappointing US ADP private-sector jobs report, which signaled further cracks in the labor market.
Private companies cut 32K jobs in September, the steepest decline since March 2023. Moreover, August’s figures were revised down to show a loss of 3K jobs, compared to the previously reported 54K increase. While the ISM Manufacturing PMI ticked up slightly from 48.7 to 49.1 in September, the improvement was too small to offset the weak labor data.
At the same time, markets remain largely unshaken by the risk of a partial US government shutdown, as reflected in the upbeat sentiment across equities. This has weighed on safe-haven demand for the USD and favored the risk-sensitive Kiwi. Still, expectations of additional rate cuts by the Reserve Bank of New Zealand (RBNZ) could limit upside potential for the NZD/USD pair.
Looking ahead, traders will watch for sustained buying beyond the 200-day Simple Moving Average (SMA) near 0.5840 before confirming a lasting bottom for the pair. With US macroeconomic releases such as Weekly Jobless Claims potentially delayed due to the government shutdown, market attention will remain on upcoming Fed speeches for fresh direction.
