Investing.com - The New Zealand dollar fell to a two-week low against the U.S. dollar on Friday, as upbeat economic data out of China was overshadowed by growing concerns over U.S. fiscal policy and the outlook for the euro zone.
NZD/USD hit 0.8122 on Friday, the pair’s lowest since October 24; the pair subsequently consolidated at 0.8135 by close of trade, down 1.28% for the week.
The pair is likely to find support at 0.8105, the low of October 24 and resistance at 0.8197, Thursday’s high.
The kiwi rose to the highest level of the session Friday after official data showed that Chinese consumer price inflation fell unexpectedly in October, ticking down 0.1% after a 0.3% increase the previous month.
A separate report showed that industrial production in China rose by 9.6% in October, more than the expected 9.4% increase and following a 9.2% rise the previous month.
The upbeat data eased concerns over a deeper-than-expected slowdown in China, which is New Zealand’s second- largest trading partner.
But demand for the safe-haven U.S. dollar remained underpinned amid concerns over the U.S. “fiscal cliff”, USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement.
Meanwhile, Germany’s Economic Ministry warned Friday that economic growth was likely to weaken in the fourth quarter and going into the first quarter of 2013, underlining fears over a slowdown in the bloc’s largest economy.
Elsewhere, official data showed that industrial production in France fell in October and the country’s central bank said it expected the economy to enter a recession by the end of this year.
Greece was also on investors mind. Market participants were anticipating a Greek vote on the 2013 budget on Sunday, just days after the country’s parliament narrowly approved a new austerity package needed to secure the next tranche of bailout funds.
Without the next aid installment, Greece risks default on November 16, when Athens must repay EUR5 billion of debts.
Eurozone finance ministers are to meet in Brussels on Monday, although they are not expected to approve releasing the latest aid tranche to Greece.
Meanwhile, uncertainty over whether Spain will request a bailout continued to cloud the outlook for the euro after a successful Spanish bond auction on Thursday eased pressure on Prime Minister Mariano Rajoy to seek aid before the end of this year.
Investors have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
In the coming week, investors will be anticipating preliminary data on third quarter growth from the euro zone, amid concerns that the economic downturn in the region is deepening. Markets will also be closely following developments in Greece and Spain.
In addition, New Zealand is to produce data on retail sales.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 12
Markets in the U.S. are to remain closed for the Veteran’s Day holiday.
Tuesday, November 13
The U.S. is to release official data on the federal budget balance.
Later in the day, New Zealand is to publish official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity.
Wednesday, November 14
The U.S. is to produce government data on retail sales, producer price inflation and business inventories. In addition, the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.
Thursday, November 15
The U.S. is to release a flurry of data, with reports on initial jobless claims, consumer price inflation, crude oil stockpiles, in addition to data on manufacturing activity in New York and Philadelphia.
Meanwhile, a speech by Federal Reserve Chairman Ben Bernanke would be closely watched for any indications on the future possible direction of monetary policy.
Friday, November 16
The U.S. is to round up the week with official data on the capacity utilization rate and industrial production, as well as a report on the balance of domestic and foreign securities purchases.
NZD/USD hit 0.8122 on Friday, the pair’s lowest since October 24; the pair subsequently consolidated at 0.8135 by close of trade, down 1.28% for the week.
The pair is likely to find support at 0.8105, the low of October 24 and resistance at 0.8197, Thursday’s high.
The kiwi rose to the highest level of the session Friday after official data showed that Chinese consumer price inflation fell unexpectedly in October, ticking down 0.1% after a 0.3% increase the previous month.
A separate report showed that industrial production in China rose by 9.6% in October, more than the expected 9.4% increase and following a 9.2% rise the previous month.
The upbeat data eased concerns over a deeper-than-expected slowdown in China, which is New Zealand’s second- largest trading partner.
But demand for the safe-haven U.S. dollar remained underpinned amid concerns over the U.S. “fiscal cliff”, USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement.
Meanwhile, Germany’s Economic Ministry warned Friday that economic growth was likely to weaken in the fourth quarter and going into the first quarter of 2013, underlining fears over a slowdown in the bloc’s largest economy.
Elsewhere, official data showed that industrial production in France fell in October and the country’s central bank said it expected the economy to enter a recession by the end of this year.
Greece was also on investors mind. Market participants were anticipating a Greek vote on the 2013 budget on Sunday, just days after the country’s parliament narrowly approved a new austerity package needed to secure the next tranche of bailout funds.
Without the next aid installment, Greece risks default on November 16, when Athens must repay EUR5 billion of debts.
Eurozone finance ministers are to meet in Brussels on Monday, although they are not expected to approve releasing the latest aid tranche to Greece.
Meanwhile, uncertainty over whether Spain will request a bailout continued to cloud the outlook for the euro after a successful Spanish bond auction on Thursday eased pressure on Prime Minister Mariano Rajoy to seek aid before the end of this year.
Investors have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
In the coming week, investors will be anticipating preliminary data on third quarter growth from the euro zone, amid concerns that the economic downturn in the region is deepening. Markets will also be closely following developments in Greece and Spain.
In addition, New Zealand is to produce data on retail sales.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 12
Markets in the U.S. are to remain closed for the Veteran’s Day holiday.
Tuesday, November 13
The U.S. is to release official data on the federal budget balance.
Later in the day, New Zealand is to publish official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity.
Wednesday, November 14
The U.S. is to produce government data on retail sales, producer price inflation and business inventories. In addition, the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.
Thursday, November 15
The U.S. is to release a flurry of data, with reports on initial jobless claims, consumer price inflation, crude oil stockpiles, in addition to data on manufacturing activity in New York and Philadelphia.
Meanwhile, a speech by Federal Reserve Chairman Ben Bernanke would be closely watched for any indications on the future possible direction of monetary policy.
Friday, November 16
The U.S. is to round up the week with official data on the capacity utilization rate and industrial production, as well as a report on the balance of domestic and foreign securities purchases.