The kiwi isn't getting enough credit
Sorry US dollar, today is all about New Zealand.
Politics gets all the press but fundamentals are what shape currency moves. Did you see the New Zealand jobs report earlier?
It was one of the biggest beats on a jobs report that we can remember anywhere.
The unemployment rate fell to a 10-year low of 3.9% compared to 4.5% previously and 4.4% expected. That drop came along with rising participation to 71.1% from 70.9%, making it even more impressive. As a cherry on top, wage growth in average hourly earnings was at +1.4% q/q compared to +0.8% expected.
This was a comprehensive and complete win for the kiwi.
A big reason why the currency isn't up even more is that the RBNZ decision is at 2000 GMT. The central bank still has a dovish stance and I think the market wants to wait and see their verdict before making a bigger move.
My guess is that it will come. The RBNZ can't ignore the strength of that report.
The chart is also a reason for optimism with NZD/USD putting in a low above the 2015-2016 bottom and starting to turn higher. It will be a big mountain to climb but that means plenty of pips to be had.
