NZD/USD fell to around 0.5710 in Asian trading on Friday, near a four-month low and close to 0.5700. Trading was expected to be thinner due to the Good Friday holiday.
China’s Services PMI fell to 52.1 in March from 56.7 in February, below the 53.7 forecast. The weaker China data weighed on the New Zealand dollar.
Middle East Tensions Support The Us Dollar
Middle East tensions also supported the US dollar as a safe-haven currency. US President Donald Trump urged Iran to “make a deal” after a military strike destroyed a bridge near Tehran, while Iran’s foreign minister Abbas Araghchi said strikes on civilian infrastructure would not force Iran to back down.
Markets were set to watch US March jobs data later on Friday. Forecasts pointed to 60,000 job gains and an Unemployment Rate of 4.4%.
We are seeing the NZD/USD pair under pressure, a familiar pattern when Chinese economic data disappoints. With China’s latest manufacturing PMI for March 2026 coming in at a soft 50.8, below expectations, the Kiwi is struggling to find support. This mirrors the dynamic we observed in early 2025 when similar data weakness caused the pair to fall.
The core of the issue for the coming weeks is the diverging central bank outlooks. New Zealand’s inflation remains persistent, with the latest figures showing it at 3.5%, keeping the Reserve Bank of New Zealand hawkish with its cash rate at 5.5%. Conversely, the US Federal Reserve is signaling a potential easing cycle later this year, but this is entirely dependent on incoming data.
Us Nonfarm Payrolls In Sharp Focus
This brings the upcoming US Nonfarm Payrolls (NFP) report into sharp focus. Current market expectations are for a solid, but not spectacular, addition of around 190,000 jobs, which would suggest the US labor market is cooling but not collapsing. A much stronger number would bolster the US Dollar and likely push NZD/USD below the 0.5700 level, while a significant miss could provide temporary relief for the Kiwi.
Broader risk sentiment and commodity prices are also working against the New Zealand Dollar. Ongoing global uncertainty continues to favor the safe-haven greenback. Furthermore, recent Global Dairy Trade auctions have shown some price weakness, directly impacting a key source of New Zealand’s export revenue and weighing on the currency’s value.
Given this backdrop, we should consider strategies that account for potential downside and event-driven volatility. Buying NZD/USD put options could be a prudent way to hedge against a further decline, especially leading into the NFP release. For those anticipating a significant move but uncertain of the direction, a straddle strategy around the NFP announcement could capture a breakout from the current range.
