NZD/USD slides back from mutli-week highs to low 0.6500s post-robust US jobs data, eyes next week’s US CPI

• NZD/USD slid back to the low 0.6500s from earlier multi-week highs as the buck strengthened post-strong US jobs data.
• Attention turn to US CPI next week and evidence of a further easing of US price pressures could support NZD/USD.

NZD/USD slipped back from multi-week highs it hit earlier in the session in the upper 0.6500s as the US dollar strengthened across the board in wake of solid US labour market numbers for May, data which also seemed to weigh on broader risk appetite as traders priced in a marginally more hawkish Fed policy outlook, adding further headwinds for the risk-sensitive kiwi.

The pair was last trading around 0.6520, down around 0.6% on the session, putting it on course to end the week in the red by about 0.25%, though close to the middle of this week’s 0.6460-0.6575ish range. Robust US ISM Services PMI data didn’t have too much of a bearing on the price action, nor have recent comments from US President Joe Biden, who unsurprisingly attempted to spin the latest strong US jobs report in a politically favourable light.

Next week will be comparatively quiet in terms of economic events, aside from the release of US Consumer Price Inflation data for May on Thursday. This will be the week’s main event, as it will inform the debate on whether US inflation has peaked and on the outlook for Fed policy. Many think inflation will move lower in the coming months and further evidence that this is the case could spur renewed USD weakness, with NZD/USD perhaps having a shot at surpassing its 50DMA at 0.6600.