NZ Dollar Rises Amid Risk-on Mood

(RTTNews) - The New Zealand dollar strengthened against other major currencies in the Asian session on Thursday, as Asian stocks traded higher amid optimism about the outlook for interest rates following a report showing unexpected decrease in US private sector employment in the month of September. Expectations of additional rate cuts this year, and another next year have increased among traders based on projections.

According to CME Group's FedWatch Tool, investors are betting on a 99.0% chance of a 25-basis-point interest rate cut and a remote 1.0% chance of a 50-basis-point rate cut at the Federal Reserve's October 28-29 meeting.

The U.S. government officially shut down after lawmakers failed to pass a temporary spending bill. Analysts have pointed out that the markets have historically not been materially impacted by government shutdowns.

However, the closely watched monthly US jobs data on Friday is likely to be delayed due to the shutdown.

Meanwhile, the NZD/USD pair may trade lower due to growing wagers for additional interest rate cuts by the Reserve Bank of New Zealand (RBNZ).

In the Asian trading today, the NZ dollar rose to a 9-day high of 2.0107 against the euro and a 2-day high of 85.93 against the yen, from yesterday's closing quotes of 2.0165 and 85.55, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 1.98 against the euro and 87.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi advanced to an 8-day high of 0.5839 and a 3-day high of 1.1336 from Wednesday's closing quotes of 0.5817 and 1.1369, respectively. The kiwi may test resistance around 0.60 against the greenback and 1.12 against the aussie.

Looking ahead, Eurozone unemployment rate for August is due to be released at 5:00 am ET in the European session.

In the New York session, U.S. factory orders for August and U.S. Fed's balance sheet are slated for release.