Ella 
In early trading in Asia on Thursday, the New Zealand dollar/US dollar rose moderately and was trading below the mid-range of 0.6100. The US dollar (USD) weakened to multi-week lows following Chairman Powell’s first testimony, providing some support for NZD/USD. As of press time, NZD/USD was trading at 0.6130, up 0.02% on the day.
U.S. ADP private sector employment rose by 140,000 in February from 111,000 in January, below expectations of 150,000. Meanwhile, JOLTS job openings fell to 8.863 million in January from 9.026 million previously and below expectations of 8.9 million. Investors expect U.S. nonfarm payrolls (NFP) to increase by 200,000 in February from the previous value of 353,000.
On Wednesday, Federal Reserve (FED) Chairman Powell said in a three-hour testimony that an interest rate cut may occur at some point in 2024, but it is not yet convenient to disclose the specific time. Powell noted that the central bank does not believe it would be appropriate to cut interest rates until it is confident that inflation is moving sustainably towards 2%. Rising prospects of a rate cut by the Federal Reserve in June weighed on the dollar lower and boosted NZD/USD.
Paul Conway, chief economist of the Reserve Bank of New Zealand, said that if the Federal Reserve starts to ease policy later this year, the Reserve Bank of New Zealand may start cutting interest rates earlier than expected. Conway further said that the Fed’s interest rate cuts may boost the New Zealand dollar and thereby reduce inflationary pressures.
