• NZD/USD is juggling a 10-pips range as investors’ focus is shifted to the US NFP.
• Investors should brace for volatility in the DXY on lower forecasts of NFPs.
• The RBNZ will reach neutral rates sooner than other Western leaders.

The NZD/USD pair is displaying a balanced profile in a narrow range of 0.6551-0.6561 in the early European session. The anxiety over the release of the US Nonfarm Payrolls (NFP) has sidelined the market participants. The boring activity could be the optimal tag to define the current performance of the FX domain.

As per the market consensus, 325k fresh payrolls are expected to release by the US Bureau of Labor Statistics for May. However, the payroll data from the Automatic Data Processing (ADP) Employment Change has trimmed the forecasts for NFPs significantly.

The ADP Employment Change has reported that the US economy has managed to add 128k jobs in the labor market. Therefore, expectations of 325k additional jobs in May would be meaningless. One more thing, investors should consider is the former and 10-month average NFP print. In April, the NFP landed at 428k while the 12-month average NFP is 551.6k. A serious plunge in the NFP for May is going to hurt the US dollar index (DXY) principally.

On the kiwi front, the pace of hiking interest rates by the Reserve Bank of New Zealand (RBNZ) is much faster than other Western leaders. Therefore, the RBNZ will reach neutral rates sooner than other major central banks. It would be worth seeing whether the quick rate hikes by the RBNZ will perform the required job effectively or not.