Forex - NZD/USD weekly outlook: June 8 - 12

Investing.com - The New Zealand dollar plunged to a five-year low against its U.S. counterpart on Friday, as stronger than forecast U.S. nonfarm payrolls data bolstered bets that the Federal Reserve will begin to raise rates after the summer.

NZD/USD hit 0.7026 on Friday, the pair's weakest level since September 1, 2010, before subsequently consolidating at 0.7043 by close of trade on Friday, down 1.22% for the day.

For the week, the pair fell 0.83%, the seventh consecutive weekly decline, amid growing expectations for a rate cut in New Zealand and increasing speculation that the Federal Reserve would raise interest rates as soon as September.

The Labor Department reported that the U.S. economy added 280,000 jobs in May, the most since December and far more than the 225,000 forecast by economists.

The unemployment rate ticked up to 5.5% last month from 5.4% in April, while average hourly earnings rose by 0.3%, above expectations for a 0.2% increase.

The robust jobs report added to the view that the U.S. economy was regaining strength after contracting in the first quarter, supporting the case for higher interest rates later this year.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, jumped 0.93% to 96.38 late Friday.

Meanwhile, the kiwi has been under heavy selling pressure in recent weeks as a raft of weaker than expected domestic data was seen as boosting the likelihood of a rate cut by the country’s central bank.

In the week ahead, investors will be focusing on Thursday's U.S. retail sales report for May, as well as Friday's consumer sentiment data, for fresh indications on the strength of the economy and the timing of a rate increase.

Market players will also be looking ahead to the outcome of a policy meeting of the Reserve Bank of New Zealand on Thursday.

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 and Wednesday as there are no relevant events on these days.

Tuesday, June 9

China is to release data on consumer and producer price inflation. The Asian nation is New Zealand's second-largest trade partner.

Thursday, June 11

The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.

China is to publish data on industrial production and fixed asset investment.

The U.S. is to release reports on initial jobless claims and retail sales.

Friday, June 12

The U.S. is to round up the week with data on producer price inflation and consumer sentiment.