Investing.com - The New Zealand regained ground against its U.S. counterpart on Friday, as weaker than expected U.S. employment data forced investors to recalibrate their assumptions about the future course of the Federal Reserve's monetary policy.
NZD/USD rose to 0.8700 on Tuesday, the pair’s highest since August 2, 2011, before subsequently consolidating at 0.8600 by close of trade on Friday, up 0.63% for the day but still 0.64% lower for the week.
The pair is likely to find support at 0.8513, the low from April 3 and resistance at 0.8700, the high from April 1.
The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000.
The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.
The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.
The kiwi rallied to the highest level since August 2011 earlier in the week boosted by a stronger growth outlook and hopes that China will soon take steps to shore up slowing economic growth.
The New Zealand dollar has been well-supported in recent weeks as the Reserve Bank of New Zealand began to tighten monetary policy, while growing expectations for monetary stimulus in China, a key export market for New Zealand, also benefitted the kiwi.
Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the New Zealand dollar in the week ending April 1.
Net longs totaled 18,480 contracts as of last week, compared to net longs of 18,213 contracts in the previous week.
In the week ahead, market players will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting for further clues on the future course of monetary policy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 7
Markets in China will be closed for a national holiday.
Tuesday, April 8
New Zealand is to publish private sector reports on business confidence.
Wednesday, April 9
The Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
Thursday, April 10
New Zealand is to release private sector data on manufacturing activity.
In the U.S., the Labor Department is to release its weekly report on initial jobless claims.
Friday, April 11
China is to produce data on consumer price inflation.
The U.S. is to round up the week with data on producer price inflation and the preliminary report on the University of Michigan’s consumer sentiment index.