Forex - NZD/USD weekly outlook: May 11 - 15

Investing.com - The New Zealand dollar fell to a five-week low against its U.S. counterpart on Friday, before turning higher after data showed that the U.S. economy created slightly less jobs than expected last month.

NZD/USD hit 0.7442 on Friday, the pair's weakest level since April 1, before subsequently consolidating at 0.7495 by close of trade on Friday, up 0.6% for the day.

For the week, the pair fell 0.64%, as the greenback was boosted by longer-term expectations for a U.S. rate rise.

The Labor Department reported Friday that the U.S. economy added 223,000 new jobs in April, just below expectations for jobs growth of 224,000. March’s figure was revised down to just 85,000 from a previously reported gain of 126,000.

The unemployment rate fell from 5.5% to a near seven-year low of 5.4% last month, broadly in line with forecasts.

The mixed data fuelled speculation that the Federal Reserve may hold off raising interest rates in the immediate future. However, investors conceded that higher rates still remain on the horizon.

Recent economic reports have indicated that the U.S. economy has slowed since the start of the year, prompting many investors to push back expectations on the timing of an initial rate hike by the Fed to late-2015, instead of midyear.

Meanwhile, in New Zealand, official data released Wednesday showed that the number of employed people rose by 0.7% in the first quarter, disappointing expectations for a 0.8% gain.

The report also showed that New Zealand's unemployment rate rose to 5.8% in the three months to March from 5.7% in the previous quarter, compared to expectations for a decline to 5.5%.

Elsewhere, China reported a trade surplus of $34.1 billion in April on Friday, below expectations for a surplus of $39.5 billion. Exports slumped 6.4% from a year earlier last month, disappointing expectations for a gain of 2.4%, while imports sank 16.2%, worse than forecasts for a decline of 12.0%.

The slide in imports pointed to persistent weakness in the economy, fuelling speculation policymakers will do more to boost growth.

On Sunday, the People's Bank of China cut its benchmark interest rate by a quarter percentage point to 5.10% from 5.35%, in order to spur economic activity and boost growth.

It was the third rate cut in less than six months, indicating that Beijing is becoming more aggressive in supporting the economy as its momentum slows and deflation risks rise.

The Asian nation is New Zealand's second-largest trade partner.

In the week ahead, investors will be focusing on Wednesday's U.S. retail sales report for April, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.

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 Tuesday as there is no relevant data on these days.

Wednesday, May 13

The Reserve Bank of New Zealand is to publish its financial stability report and Governor Graeme Wheeler is to hold a press conference.

China is to release a string of data, including reports on industrial production, fixed asset investment and retail sales.

Later in the day, the U.S. is to publish data on retail sales.

Thursday, May 14

New Zealand is to release private sector data on manufacturing activity and official data on retail sales.

The U.S. is to publish reports on producer prices and initial jobless claims.

Friday, May 15

The U.S. is to round up the week with reports on industrial production, manufacturing activity in the New York region and consumer sentiment.