Investing.com - The New Zealand dollar fell to a two-week low against its U.S. counterpart on Friday, amid growing expectations the Federal Reserve will raise interest rates later this year.
NZD/USD hit 0.6535 on Friday, the pair's weakest level since July 20, before subsequently consolidating at 0.6591 by close of trade, down 0.2% for the day.
On the week, the pair inched up 0.23%, but declined 2.53% for the month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.32 late Friday, paring the week’s gains to 0.1%.
The dollar index rose 1.86% in July, boosted by expectations that the Federal Reserve could raise rates as soon as September if the economy continues to improve as expected.
The central bank sounded more upbeat about the economy following its policy meeting last week, leaving the door open for an interest-rate hike as soon as September.
In its rate statement published Wednesday, the Fed described the economy as expanding "moderately," while upgrading its view of the labor and housing markets.
The Fed gave no clear indication of the timing of the next rate hike, but left itself room to act as early as September, citing "solid" gains in the job market and "additional" improvement in the housing sector.
The Commerce Department said on Thursday that the economy grew 2.3% in the second quarter, missing expectations for growth of 2.6%, but improving from growth of 0.6% in the preceding quarter.
Meanwhile, in New Zealand, data on Friday showed that the ANZ Business Confidence Index fell to minus 15.3 in July from minus 2.3 the previous month.
The kiwi was also pressured by plunging commodity prices and steep declines on China's stock market last week.
In the week ahead, investors will be focusing on Friday's nonfarm payrolls report for July, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.
Market players will also be focusing on New Zealand employment data due on Wednesday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, August 3
China is to release revised data on manufacturing activity.
The U.S. is to release data on personal income and expenditure, while the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, August 4
The U.S. is to report on factory orders.
Wednesday, August 5
New Zealand is to release its quarterly unemployment report.
The U.S. is to release the ADP report on private sector hiring, while the ISM is to release data on service sector activity.
Thursday, August 6
The U.S. is to release its weekly government report on initial jobless claims.
Friday, August 7
The U.S. is to round up the week with the closely watched government report on nonfarm payrolls.