NZD advances on poor US Jobs

13:11 NZ Time / 11:11 AEST, Wednesday 23 October 2013

NZD advances on poor US Jobs

By Andrew May (Sales Trader, CMC Markets New Zealand)

With the meteoric rise of the AUD and NZD, expectations of strong headwinds from September US jobs report did little to quench the current voracious global risk appetite - and traders spoke their minds in unison at the disappointing number. Gold jumped US $26 to 1342oz taking with it the NZDUSD up from US 84.50 to open today 85.20c.

The US Federal Reserve ‘taper’ mandate now looks very much in doubt, which points to a defined loss of momentum for the world’s strongest economy. A weaker than expected jobs number (148,000 vs 180,000) and unemployment marginally lower at 7.2% but still well above the Fed’s taper target of 6.5%, has potentially signalled a longer timeframe for the current ‘easy money’ QE programme. The Federal Reserve will need to head back to the drawing board, clear out the cobwebs from the last two weeks and begin a clearer interpretation of a fiscal development for 2014. Next week’s FOMC meeting will be one of the most important meetings by far this year.

All this has created little to no resistance for the NZD for the remainder of Q3. Pricing in obligatory profit taking, we will continue to trade heavily supported at US 83c, with the next level of resistance now earmarked at US 85.90. Unless there is a real contraction via Asian economies or a bumper October US jobs number, investors should get set for a springboard to a higher stratosphere for 2014, if the Greenback continues to wain in attraction.   

ENDS

© Scoop Media