• NZD/USD has erased a kneejerk move higher following the weaker than expected headline NFP number.
• The pair is now probing annual lows around 0.6770.
• The latest jobs report signals underlying strength in the US economy and the US dollar looks in a good position.

NZD/USD saw kneejerk upside in response to the latest US labour market report, which on the face of its was much weaker than expectations. The pair nearly hit session highs in the 0.6810s but has since reversed back to below pre-data levels. It recently broke out to fresh annual lows under 0.6770, where it now trades with on the day losses of about 0.75%.

The Bureau of Labour Statistics (BLS) headline NFP number was weaker than expected a just 210K (the median forecast was for 550K). Moreover, Average Hourly Earnings growth was a tad weaker than forecast. But the separate Household survey also compiled by the BLS showed the unemployment rate falling to 4.2%, much larger than the expected drop to 4.5% from 4.6% and also showed the participation rate rising to a fresh post-pandemic high at 61.8%. That meant, according to the Household survey, there were over 1M more employed persons in the US economy in November versus October.