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Forex - NZD/USD weekly outlook: November 11 - 15

Published 11/10/2013, 08:05 AM
NZD/USD
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Investing.com - The New Zealand dollar ended Friday’s session at a one-week low against its U.S. counterpart, after stronger-than-expected U.S. jobs data rekindled expectations that the Federal Reserve could start to taper its stimulus program as soon as next month.

NZD/USD hit 0.8225 on Friday, the pair’s lowest since November 1; the pair subsequently consolidated at 0.8244 by close of trade on Friday, down 0.97% for the day and 0.19% lower for the week.

The pair is likely to find support at 0.8211, the low from November 1 and resistance at 0.8396, the high from November 7.

The dollar gained ground after the Department of Labor said the U.S. economy added 204,000 jobs in October, much more than the 125,000 increase forecast by economists.

September's figure was revised up to 163,000 from a previously reported 148,000. The unemployment rate ticked up to 7.3% from an almost five-year low of 7.2% the previous month.

The report came one day after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.

The robust data raised the possibility that the Fed may start to scale back its USD85 billion-a-month asset purchase program as soon as next month.

The kiwi remained supported after Chinese trade data showed that both imports and exports rose in October, easing concerns over a slowdown in the world’s second-largest economy.

China's exports rose 5.6% in October from a year earlier while imports increased 7.6%, resulting in a USD31.1 billion trade surplus.

Data released over the weekend showed that Chinese industrial output rose more-than-forecast in October, while consumer price inflation inched up modestly.

Industrial production in China rose 10.3% last month, beating expectations for a 10.0% increase, while CPI inched up to 3.2% from 3.1% in September, missing estimates for 3.3% inflation.

China is New Zealand's second biggest export partner.

Meanwhile, in New Zealand, data released earlier in the week showed that the number of employed people rose 1.2% in the third quarter, beating expectations for a 0.5% uptick.

The report also showed that New Zealand's unemployment rate fell to 6.2% in the last quarter, from 6.4% in the previous quarter, in line with expectations.

In the week ahead, investors will be closely watching Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve.

Market players will also be focusing on the release of key retail sales data out of New Zealand.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The data skips Monday as there are no relevant events on this day.

Tuesday, November 12

The Reserve Bank of New Zealand is to release its bi-annual financial stability report, which outlines the bank’s view on the outlook for inflation and growth.

Wednesday, November 13

New Zealand is to publish data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.

Thursday, November 14

The U.S. is to release official data on the trade balance, the difference in value between imports and exports and the weekly report on initial jobless claims.

Friday, November 15

The U.S. is to round up the week with data on manufacturing activity in the New York region, as well as reports on industrial production and import prices.


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