Ella 
In early Asian trading on Thursday, NZD/USD strengthened above 0.6100. New Zealand’s fourth-quarter labor market data was solid and the prospect of further tightening by the New Zealand Reserve Bank was repriced, which boosted NZD/USD. NZD/USD is currently trading around 0.6118, with an intraday increase of 0.16%.
New Zealand’s fourth-quarter labor market data was stronger than expected. New Zealand’s unemployment rate rose to 4.0% from 3.9%, missing expectations of 4.2%. This data may affect the policy outlook of the New Zealand Reserve Bank, which may raise interest rates again this month after strong labor market data. This in turn supports the New Zealand dollar and may prevent NZD/USD losses in the short term.
In addition, the latest data from the National Bureau of Statistics of China showed that China’s consumer price index recorded an annual rate of -0.8% in January, compared with the previous value of -0.3%, which was lower than market expectations of 0.5%. On a monthly basis, the monthly inflation rate rose to 0.3% in January from 0.1% in December. Meanwhile, the producer price index rose to an annualized rate of -2.5% in January from -2.7% in December, beating expectations of -2.6%.
In the U.S. dollar, Federal Reserve Governor Adriana Kugler said on Wednesday that inflation is showing clear signs of slowing, but she is not ready to start cutting interest rates yet. Meanwhile, Minneapolis Fed President Neel Kashkari said the Fed needs more time to maintain confidence in the path of inflation before starting to cut interest rates. Hawkish comments from Federal Reserve officials provided some support to the US dollar (USD) and weighed on NZD/USD.
