Investing.com - The New Zealand dollar trimmed losses to end Friday’s session little changed against its U.S. counterpart, as appetite for riskier assets was kept in check amid concerns over the global economic outlook.
NZD/USD hit 0.8214 on Friday, the pair’s lowest since January 4; the pair subsequently consolidated at 0.8251 by close of trade, 1.32% lower for the week.
The pair is likely to find support at 0.8214, Friday’s low and resistance at 0.8322, Thursday’s high.
The kiwi came under pressure after government data showed that manufacturing activity in China fell to a five-month low of 50.1 in February from a reading of 50.4 in January.
China is New Zealand’s second-largest export destination.
Appetite for risky assets was further weighed after weak manufacturing data out of the U.K. and the euro zone fuelled concerns over the outlook for global growth.
Revised data showed that manufacturing activity in the euro zone contracted in February at the same pace as in January, while the U.K. manufacturing sector suffered a shock contraction last month.
The greenback also found support amid worries over U.S. spending cuts, known as the sequester, after lawmakers failed to reach an agreement on a deficit reduction plan.
President Barack Obama warned Friday that federal spending cuts will cause “ripple effects” through the U.S. economy. Obama called on Congress to pass an alternative budget plan that closes tax loopholes and cuts spending, including entitlements.
Meanwhile, speculation the Fed might end its bond-buying program was fuelled after data showed that the U.S. manufacturing sector expanded at its fastest pace since June 2011 last month, while a separate report showed that U.S. consumer confidence rose in February.
The Institute for Supply Management said its manufacturing purchasing managers’ index rose to 54.2 from 53.1 in January, while the final reading of the University of Michigan’s consumer sentiment index came in at 77.6, from a preliminary reading of 76.3.
Elsewhere, the kiwi was higher against the euro on Friday, with EUR/NZD dipping 0.33% to hit 1.5776.
The euro came under pressure amid ongoing speculation of a possible rate cut by the European Central Bank at its upcoming policy meeting on Thursday.
Concerns that Italy would not be able to continue to implement structural reforms and austerity measures following inconclusive election results also weighed.
In the week ahead, markets will be focusing on an interest rate decision by the ECB. In addition, Friday’s data on U.S. nonfarm payrolls will be closely watched as investors attempt to gauge the strength of the economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 4
New Zealand is to publish data on commodity prices.
Tuesday, March 5
The U.S. Institute of Supply Management is to release a report on service sector activity, a leading indicator of economic health.
Wednesday, March 6
The U.S. is to publish data on ADP nonfarm payrolls, which leads government data on nonfarm payrolls by two days. The U.S. is also to release official data on factory orders and crude oil stockpiles.
Thursday, March 7
The U.S. is to publish the weekly government report on initial jobless claims and official data on the trade balance.
Friday, March 8
The U.S. is to round up the week with government data on nonfarm payrolls and the unemployment rate and data on average hourly earnings.
NZD/USD hit 0.8214 on Friday, the pair’s lowest since January 4; the pair subsequently consolidated at 0.8251 by close of trade, 1.32% lower for the week.
The pair is likely to find support at 0.8214, Friday’s low and resistance at 0.8322, Thursday’s high.
The kiwi came under pressure after government data showed that manufacturing activity in China fell to a five-month low of 50.1 in February from a reading of 50.4 in January.
China is New Zealand’s second-largest export destination.
Appetite for risky assets was further weighed after weak manufacturing data out of the U.K. and the euro zone fuelled concerns over the outlook for global growth.
Revised data showed that manufacturing activity in the euro zone contracted in February at the same pace as in January, while the U.K. manufacturing sector suffered a shock contraction last month.
The greenback also found support amid worries over U.S. spending cuts, known as the sequester, after lawmakers failed to reach an agreement on a deficit reduction plan.
President Barack Obama warned Friday that federal spending cuts will cause “ripple effects” through the U.S. economy. Obama called on Congress to pass an alternative budget plan that closes tax loopholes and cuts spending, including entitlements.
Meanwhile, speculation the Fed might end its bond-buying program was fuelled after data showed that the U.S. manufacturing sector expanded at its fastest pace since June 2011 last month, while a separate report showed that U.S. consumer confidence rose in February.
The Institute for Supply Management said its manufacturing purchasing managers’ index rose to 54.2 from 53.1 in January, while the final reading of the University of Michigan’s consumer sentiment index came in at 77.6, from a preliminary reading of 76.3.
Elsewhere, the kiwi was higher against the euro on Friday, with EUR/NZD dipping 0.33% to hit 1.5776.
The euro came under pressure amid ongoing speculation of a possible rate cut by the European Central Bank at its upcoming policy meeting on Thursday.
Concerns that Italy would not be able to continue to implement structural reforms and austerity measures following inconclusive election results also weighed.
In the week ahead, markets will be focusing on an interest rate decision by the ECB. In addition, Friday’s data on U.S. nonfarm payrolls will be closely watched as investors attempt to gauge the strength of the economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 4
New Zealand is to publish data on commodity prices.
Tuesday, March 5
The U.S. Institute of Supply Management is to release a report on service sector activity, a leading indicator of economic health.
Wednesday, March 6
The U.S. is to publish data on ADP nonfarm payrolls, which leads government data on nonfarm payrolls by two days. The U.S. is also to release official data on factory orders and crude oil stockpiles.
Thursday, March 7
The U.S. is to publish the weekly government report on initial jobless claims and official data on the trade balance.
Friday, March 8
The U.S. is to round up the week with government data on nonfarm payrolls and the unemployment rate and data on average hourly earnings.