Investing.com - The New Zealand dollar fell to a one-week low against its U.S. counterpart on Friday, amid expectations that the Federal Reserve will start raising interest rates later this year.
NZD/USD hit 0.7543 on Friday, the pair's lowest since March 20, before subsequently consolidating at 0.7564 by close of trade on Friday, down 0.47% for the day and little changed for the week.
Federal Reserve Chair Janet Yellen said in a speech Friday that a rate hike may be warranted later this year, but added that weakening inflation pressures could force the Fed to delay.
The speech echoed the Fed’s latest policy statement, released on March 18, which indicated that it may raise interest rates more gradually than markets had expected.
Her comments came after the Commerce Department reported that the U.S. economy expanded at an annual rate of 2.2% in the fourth quarter, unchanged from the preliminary estimate and below economists’ forecasts for an upward revision to 2.4%.
Another report showed that the final reading of the University of Michigan’s consumer sentiment index ticked down to 93.0 this month from a final reading of 95.4 in February.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.1% to 97.65 on Friday. For the week, the index lost 0.66%, the second consecutive weekly decline.
Despite recent losses, the greenback looks likely to continue to strengthen, with the Fed still expected to raise interest rates ahead of other central banks.
In the week ahead, investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labor market.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 30
The U.S. is to release reports on personal spending and pending home sales.
Tuesday, March 31
New Zealand is to produce reports on building consents and business confidence.
The U.S. is to release data on consumer confidence.
Wednesday, April 1
China is to publish its official manufacturing index. The Asian nation is New Zealand's second largest trade partner.
The U.S. is to release the ADP nonfarm payrolls report, which outlines private sector jobs growth, while the Institute of Supply Management is to release data on manufacturing activity.
Thursday, April 2
The U.S. is to release data on weekly initial jobless claims, as well as reports on the trade balance and factory orders.
Friday, April 3
Markets in New Zealand will be closed for the Good Friday holiday.
The U.S. is to round up the week with what will be a closely watched government report on non-farm payrolls, the unemployment rate and average earnings.