Investing.com - The New Zealand dollar jumped to a more-than one-week high against its U.S. counterpart on Friday, after weaker-than-expected U.S. first quarter growth data fueled expectations for more monetary easing by the Federal Reserve.
NZD/USD hit 0.8231 on Friday, the pair’s highest since April 18; the pair subsequently consolidated at 0.8215 by close of trade, adding 0.57% over the week.
The pair is likely to find support at 0.8104, Friday’s low and resistance at 0.8278, the high of April 12.
The Commerce Department said gross domestic product in the U.S. expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase.
Earlier in the week, Fed Chairman Ben Bernanke left open the possibility of further measures to bolster economic growth after the central bank’s monetary policy meeting, saying policymakers were “prepared to do more” if necessary.
The New Zealand dollar also found support after new easing measures announced by the Bank of Japan fell short of some market expectations.
Following its monetary policy meeting on Thursday, the BoJ said it will increase the size of its asset purchase fund by JPY5 trillion, while a program to provide loans to banks was cut back by JPY5 trillion. Economists had expected an increase of as much JPY10 trillion to the nation’s stimulus program.
Overall market sentiment was boosted on Friday as a well received auction of Italian government debt eased investor concerns over the euro zone, following a two-notch downgrade of Spain by ratings agency Standard & Poor’s.
S&P cut Spain’s long-term credit rating to BBB+ from A and gave it a negative outlook on Thursday, saying that the recession will undermine government efforts to reduce one of the largest budget deficits in the single currency bloc.
In the week ahead, Friday’s data on U.S. non-farm payrolls will be eagerly anticipated amid concerns that the economic recovery in the U.S. is losing momentum, while New Zealand is also to publish official data on employment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 30
New Zealand is to release official data on building consents, a leading gauge of future construction activity, followed by a report on the trade balance, the difference in value between imported and exported goods. The country is also to publish data on business confidence.
The U.S. is to publish official data on core personal consumption expenditures price inflation and on personal spending, followed by a report on business activity in Chicago.
Tuesday, May 1
New Zealand is to release official data on labor cost inflation, a leading indicator of consumer inflation.
In the U.S., the Institute for Supply Management is to release a closely watched report on manufacturing activity.
Wednesday, May 2
The U.S. is to produce a report on non-farm employment change, a leading indicator of economic health, followed by government data on factory orders and crude oil stockpiles.
Thursday, May 3
New Zealand is to produce official data on employment change and on the unemployment rate, a leading indicator of economic health.
Later Thursday, the U.S. is to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs, an important signal of consumer inflation. The country is also to publish an ISM report on service sector growth.
Friday, May 4
The U.S. is to round up the week by publishing its closely watched government data on non-farm employment change and the unemployment rate, as well as a report on average hourly earnings.
NZD/USD hit 0.8231 on Friday, the pair’s highest since April 18; the pair subsequently consolidated at 0.8215 by close of trade, adding 0.57% over the week.
The pair is likely to find support at 0.8104, Friday’s low and resistance at 0.8278, the high of April 12.
The Commerce Department said gross domestic product in the U.S. expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase.
Earlier in the week, Fed Chairman Ben Bernanke left open the possibility of further measures to bolster economic growth after the central bank’s monetary policy meeting, saying policymakers were “prepared to do more” if necessary.
The New Zealand dollar also found support after new easing measures announced by the Bank of Japan fell short of some market expectations.
Following its monetary policy meeting on Thursday, the BoJ said it will increase the size of its asset purchase fund by JPY5 trillion, while a program to provide loans to banks was cut back by JPY5 trillion. Economists had expected an increase of as much JPY10 trillion to the nation’s stimulus program.
Overall market sentiment was boosted on Friday as a well received auction of Italian government debt eased investor concerns over the euro zone, following a two-notch downgrade of Spain by ratings agency Standard & Poor’s.
S&P cut Spain’s long-term credit rating to BBB+ from A and gave it a negative outlook on Thursday, saying that the recession will undermine government efforts to reduce one of the largest budget deficits in the single currency bloc.
In the week ahead, Friday’s data on U.S. non-farm payrolls will be eagerly anticipated amid concerns that the economic recovery in the U.S. is losing momentum, while New Zealand is also to publish official data on employment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 30
New Zealand is to release official data on building consents, a leading gauge of future construction activity, followed by a report on the trade balance, the difference in value between imported and exported goods. The country is also to publish data on business confidence.
The U.S. is to publish official data on core personal consumption expenditures price inflation and on personal spending, followed by a report on business activity in Chicago.
Tuesday, May 1
New Zealand is to release official data on labor cost inflation, a leading indicator of consumer inflation.
In the U.S., the Institute for Supply Management is to release a closely watched report on manufacturing activity.
Wednesday, May 2
The U.S. is to produce a report on non-farm employment change, a leading indicator of economic health, followed by government data on factory orders and crude oil stockpiles.
Thursday, May 3
New Zealand is to produce official data on employment change and on the unemployment rate, a leading indicator of economic health.
Later Thursday, the U.S. is to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs, an important signal of consumer inflation. The country is also to publish an ISM report on service sector growth.
Friday, May 4
The U.S. is to round up the week by publishing its closely watched government data on non-farm employment change and the unemployment rate, as well as a report on average hourly earnings.