Traders await New Zealand’s Q2 labor data, with wage growth and unemployment key for RBNZ policy expectations.
NZD/USD holds near 0.5870, consolidating last week’s gains as the USD recovers from stronger-than-expected US ISM manufacturing data. The July ISM print rose to 55.6, beating forecasts and lifting Treasury yields, which pressured risk-sensitive currencies like the NZD. However, a drop in crude oil prices after US-Iran talks improved risk sentiment, limiting the pair’s downside.
New Zealand’s second-quarter labor market report is the focus, with unemployment expected to tick up to 5.4% from 5.3% and employment growth slowing to 0.1% QoQ. The Labor Cost Index, a key wage growth measure, is forecast to rise 0.6% QoQ, up from 0.5%. A stronger-than-expected print could challenge RBNZ’s disinflation outlook and delay rate cuts.
The RBNZ has signaled a cautious approach, and today’s data may shape expectations for its next move. A mix of rising unemployment and accelerating wage growth could complicate the policy path, keeping traders on alert.