NZD/USD consolidates below 0.5800 ahead of US data-packed day

POPULAR ARTICLES

The NZD/USD pair trades in a tight range around 0.5785 during the late Asian trading session on Wednesday. The Kiwi pair meanders as the US Dollar (USD) trades calmly ahead of a slew of United States (US) economic data, releasing in the North American session.

NZD/USD trades quietly around 0.5785 as investors await key US data releases.
US private employers are expected to have hired a fresh 45K workers in December.
Investors await China’s Trade Balance data for fresh cues on the New Zealand Dollar’s outlook.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades almost flat near 98.55.

Later in the day, US agencies will report ADP Employment Change and ISM Services PMI data for December, and the JOLTS Job Openings data for November. Investors will pay close attention to employment-related data as it would have a significant impact on the Federal Reserve’s (Fed) monetary policy outlook.

The ADP is expected to show that private employers added 45K workers against firing 32K payrolls in November. Meanwhile, new job postings by overall employers are expected to come in at 7.64 million, almost in line with October’s reading of 7.67 million.

Signs of improving labor demand would weigh on market expectations for more interest rate cuts by the Fed in the near term. In 2025, the Fed reduced interest rates by 75 basis points (bps) to 3.50%-3.75% to support weakening job market conditions.

This week, the New Zealand Dollar (NZD) will be influenced by China’s Trade Balance data for December, which will be released on Thursday. The impact of China’s will be significant on the Kiwi dollar, given that the New Zealand (NZ) economy relies heavily on its exports to Beijing.

Economic Indicator

ADP Employment Change

The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.