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NZDUSD falls from two-month highs as unemployment hits 5.2%

The NZDUSD fell from two-month highs in early trade today after the local unemployment rate jumped to 5.2%.

Today’s release is seen as a significant jump from the 4.8% rate seen in the September quarter. The NZDUSD dropped one quarter of a cent after the release.

However, the employment change number, which is more closely watched by analysts, saw a solid 0.8% gain.

Greenback falls

The NZD was stronger overnight as the US dollar continued to lose ground.

Ongoing worries about the impact of the US administration’s new travel restrictions and increasingly protectionist economic policies have seen the greenback struggle so far this year.

The NZDEUR fell 0.2% as the euro rallied sharply.

The kiwi was flat against the Japanese yen and British pound.

Fed in focus

The focus will remain on the US dollar with major releases due over the next few days.

Tomorrow morning, the Federal Reserve meets to announce its latest interest rate decision. The market expects the Fed to hold rates steady but could shift to a more obvious tightening bias in its statement.

If so, the USD could regain some of its recent losses.

On Friday, the US non-farm payrolls will be closely watched.

For more on February's upcoming events, please download out latest Risk Events Calendar.

By Steven Dooley -- Currency Strategist APAC

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