Investing.com - The New Zealand dollar slumped to the lowest level in more than three years against its U.S. counterpart on Friday, as demand for safe haven assets was boosted amid turmoil in the currency market.
NZD/USD hit 0.7432 on Friday, the pair's lowest since November 2011, before subsequently consolidating at 0.7448 by close of trade on Friday, down 0.74% for the day and 4.45% lower for the week.
The pair is likely to find support at 0.7369, the low from November 25, 2011, and resistance at 0.7582, the high from January 22.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose to more than 11-year highs of 95.77 on Friday, before trimming gains to end at 95.32, up 0.69% for the day and 2.33% higher for the week.
The euro sold off after the European Central Bank unveiled a €1.2 trillion asset purchase program on Thursday. The central bank will purchase €60 billion in assets per month, starting in March and continuing until late 2016, to combat slowing growth and inflation in the euro area.
The single currency was also under pressure amid uncertainty over the outcome of Greek elections, due to be held on Sunday, with anti-bailout party Syriza leading in the polls.
Meanwhile, concerns over the health of the global economy remained in focus.
Data on Friday showed that the preliminary reading of China’s HSBC manufacturing index inched up to 49.8 in January from 49.6 in December.
Despite the modest improvement, the figure held below the 50.0-level, which indicates contraction, for the second straight month, underlining concerns over a cooling economy.
The disappointing factory data came after data released earlier in the week showed that China’s economy grew 7.4% in 2014 from a year earlier, below the government's official target of 7.5% and the slowest pace since 1990. It expanded 7.7% in 2013.
The Asian nation is New Zealand's second-largest trade partner.
In the week ahead, investors will be awaiting the outcome of Wednesday’s Federal Reserve policy meeting for further clarification on when interest rates might start to rise.
New Zealand’s central bank is also to hold a policy meeting on Wednesday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.
Tuesday, January 27
New Zealand is to publish private sector data on business confidence.
The U.S. is to release data on durable goods orders, as well as private sector reports on consumer confidence and new home sales.
Wednesday, January 28
The Federal Reserve is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Later in the day, the Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement. The country is also to release data on the trade balance.
Thursday, January 29
The U.S. is to publish the weekly report on initial jobless claims as well as private sector data on pending home sales.
Friday, January 30
The U.S. is to round up the week with preliminary data on fourth quarter growth as well as reports on business activity in the Chicago region and revised data on consumer sentiment.