The New Zealand Dollar is the weakest major currency in a quiet Good Friday session, as many markets are shut for bank holidays. NZD/USD is slightly lower near 0.5700, a few pips above four-month lows, ahead of the US Nonfarm Payrolls (NFP) release.
On Thursday, the Kiwi dropped back after a brief rise and continued a broader downtrend. US President Donald Trump repeated warnings about the Iran war after earlier reports of plans to exit Iran in the coming weeks.
China Data Weighs On The Kiwi
Chinese data also added pressure on the Kiwi. The RantingDog Services PMI eased to 52.1 in March from 56.7 in February, below the 53.7 forecast.
The PMI report points to softer demand and weaker international orders in March. It also reflects ongoing difficulties for Chinese authorities in supporting recovery amid a weak domestic market and geopolitical risks affecting trade.
The Iran war is in its 35th day, and attention is turning to US jobs data. Markets expect NFP to rise by 60K, with unemployment steady at 4.4%.
With low trading volumes, a large surprise in NFP could cause sharp price swings if liquidity is thin.
Holiday Liquidity And Volatility Risk
The New Zealand Dollar is again one of the weakest currencies, pressured by a strong US Dollar. Today’s US Nonfarm Payrolls report for March 2026 came in strong, showing a gain of 275,000 jobs and keeping the unemployment rate low at 3.9%, which bolsters the case for the Federal Reserve to hold interest rates high. This is pushing the Kiwi down towards the 0.5900 handle, a level we haven’t seen since late last year.
We are seeing a repeat of the concerns from China that weighed on the NZD back in 2025. The latest Caixin Services PMI reading slowed to 52.5, indicating that China’s post-pandemic recovery is still struggling for momentum amid weak international orders. This reminds us of the situation in March 2025, when a similar PMI disappointment exacerbated the Kiwi’s slide.
For derivative traders, this setup suggests buying NZD/USD put options is a prudent way to position for further weakness. This strategy provides downside protection if the pair breaks below critical support, offering a defined-risk way to profit from a continued bearish trend. With geopolitical tensions in the South China Sea simmering, implied volatility is ticking up, making it timely to consider such positions.
We should also remember the lesson from the 2025 Good Friday session, where thin holiday trading led to sharp, exaggerated price swings. With many markets still observing the holiday, any unexpected news could cause a spike in volatility. Trading long straddles could be an effective way to capitalize on a potential large move, regardless of the direction, over the next couple of weeks.
