NZD/USD turns sideways-to-negative around 0.6420, US NFP eyed

• NZD/USD is struggling to climb above 0.6430 ahead of the US Employment data.
• Higher Labor Cost Index in the kiwi zone has battered the antipodean.
• The US NFP is seen at 391k against the prior print of 431k.

The NZD/USD pair has witnessed a bearish open rejection-reversion session and has now turned sideways with a negative bias. After a flat opening at around 0.6442, the asset moved higher till 0.6442 but aggressive responsive selling activity at higher levels dragged the asset below the opening price.

The asset is scaling gradually lower despite a steady US dollar index (DXY), which shows that kiwi bulls are weaker against other risk-sensitive currencies too. It looks the consistent employment data released on Wednesday is responsible for the same. Statistics New Zealand reported the Unemployment Rate at 3.2%, in line with the estimates and prior print. Also, the Employment Change remained similar to the forecast at 0.1%.

One thing which has dented the demand of the antipodean is the higher Labor Cost Index from its previous figures. The NZ Labor Cost Index came in at 3.1%, similar to the market consensus but higher than the prior print of 2.8%. This shows that the consistent labor market is bolstering the inflationary pressures as higher labor costs will result in higher inflation in an already inflated market.

Meanwhile, the DXY is struggling to overstep 103.70 as investors are awaiting the disclosure of the US Nonfarm Payrolls (NFP). A preliminary estimate for the US NFP is 391k against the past print of 431k. Higher-than-expected job additions in the US labor force will strengthen the DXY bulls further.