NZD/USD skids below 0.6430 on flat NZ Unemployment Rate, Fed’s policy eyed

• NZD/USD has slipped below 0.6430 despite stable NZ labor data.
• Volumes are returning in the Fx domain after a quiet Asian session.
• The DXY is attempting to establish above 103.50 ahead of the Fed’s policy.

The NZD/USD pair has surrendered its entire intraday gains after Statistics New Zealand reported the Unemployment Rate at 3.2%. The NZ jobless rate has come in line with the market consensus and prior print. The asset has tumbled below 0.6430 and is likely to remain vulnerable ahead of the Federal Reserve (Fed)’s monetary policy.

Flat Unemployment data printed by Statistics New Zealand seems encouraging amid a lower growth rate on a broader note.  It is worth noting that the NZ administration is consistently maintaining the full employment levels. Also, the Employment Change has been recorded at 0.1%, similar to the forecasts, which indicates a tight labor market. Moreover, the yearly Labor Cost Index has jumped to 3.1% from the previous print of 2.8%. Higher wage prices along with consistent Employment Change and jobless rate dictate a healthy labor market, which bolsters the odds of one more rate hike by the Reserve Bank of New Zealand (RBNZ) in its next monetary policy meeting.

On the dollar front, the US dollar index (DXY) has managed to sustain above 103.50 as volumes are returning to the Fx domain after a quiet Asian session. Investors are facing anxiety attacks ahead of the interest rate decision announcement by the Federal Reserve (Fed). The roadmap of balance sheet reduction and guidance on the remaining five monetary policy committee (MPC) meetings will remain in focus.