NZD Recovers Modestly After Falling to Fresh 2026 Lows

The NZD recovered modestly on Friday night after falling to fresh 2026 lows during local trading. The currency's gains came despite a soft US employment report, which reinforced market expectations for the Fed to hold off tightening again in October.

US labour market data showed non-farm payrolls rose just 29k in September, with net -60k of revisions over the previous two months. The unemployment rate ticked higher to 4.2%, while average hourly earnings rose just 0.1% m/m, driving the annual increase down to a fresh five-year low of 3.0%.

The soft US employment data gave the market more confidence that the Fed would likely hold rates steady at its next meeting late-October. This reduced pressure on Treasury yields, which initially fell after the employment report but soon rebounded.