NZD/USD juggles around 0.6150 as investors await US NFP

• NZD/USD is hovering around 0.6150 to cover time-based correction ahead of US NFP.
• As the US economy is operating at full employment levels, a minor decline in US NFP won’t impact DXY.
• The RBNZ is likely to announce a couple of interest rate hikes ahead.

The NZD/USD pair is displaying back-and-forth moves in a narrow range of 0.6139-0.6152 in the early European session. The asset is trading lackluster after a firmer rebound from Monday’s low near 0.6100. The overall context is indicating that the pullback move by the kiwi bulls will escalate further as the market mood looks firmer. The risk undertone seems bullish as the impact of the hawkish stance adopted by Federal Reserve (Fed) chair Jerome Powell at the Jackson Hole Economic Symposium looks fading now.

Now, investors are building their positions ahead of the US Nonfarm Payrolls (NFP) data, which will release on Friday. Market veterans are worried over an expected decline in employment generation numbers, which are expected to land at 285k. However, a decline in the US NFP is not so bad for the US dollar index (DXY) as the US economy is already operating at full employment levels. And, room for more job creation is extremely low ahead.

The US Unemployment Rate is expected to remain stable at 3.5%. And, the Average Hourly Earnings data is seen higher by 10 basis points (bps) at 5.3%. An improvement in the labor cost index doesn’t seem lucrative as price pressures are skyrocketing and a mild improvement in the paychecks won’t offset the forced higher payouts.

On the NZ front, the Reserve Bank of New Zealand (RBNZ) is continued on the path of hiking its Official Cash Rate (OCR). As per commentary from RBNZ Governor Adrian Orr at Jackson Hole, price stability carries significant importance over growth prospects in the current period. Investors should brace for a couple of interest rate hikes ahead.