NZD/USD struggles around 0.6560 on DXY’s sluggish rebound, investors eye US NFP

• The unavailability of any potential trigger in the kiwi docket has forced NZD/USD to struggle around 0.6560.
• The DXY is displaying a vulnerable performance on lower US NFP forecasts.
• RBNZ Adrian Orr hiked the OCR by 50 basis points in its last monetary policy meeting.

The NZD/USD pair is attempting to break the critical resistance of 0.6560 from the early New York session. A light economic calendar on the kiwi front has failed to provide any potential trigger to the antipodean. The asset has recorded a four-day winning streak and is expected to continue further, which looks possible after overstepping Monday’s high at 0.6560.

Broader weakness in the US dollar index (DXY) is driving the risk-sensitive dominating currencies higher. The DXY has remained vulnerable for the past two weeks as a rebound in the positive market sentiment trimmed the safe-haven's appeal. The DXY has printed a fresh monthly low at 101.30 however, a minor rebound has been witnessed in the early Tokyo, which will meet the responsive sellers.  

This week, the entire investing community will focus on the US Nonfarm Payrolls (NFP). A preliminary estimate for the jobs additions in the nonfarm labor force is 320k in the month of May against the prior print of 428k. This will dampen the greenback further as the figure looks significantly lower. Also, the 12-month average of the US NFP has been recorded at 551.6k.

On the kiwi front, investors are still having the hangover of the hawkish monetary policy by the Reserve Bank of New Zealand (RBNZ). In order to tame the galloping inflation, RBNZ Governor Adrian Orr features a rate hike by 50 basis points (bps). Officially, the Official Cash Rate (OCR) has reached 2%. Going forward, the Caixin Manufacturing PMI data will be crucial for the kiwi dollar as the antipodean is a leading exporter to China. The economic data is seen at 47, higher than the prior print of 46.