Investing.com - The New Zealand dollar ended Friday’s session close to a one-week high against its U.S. counterpart, after weaker-than-expected U.S. economic data rekindled expectations that the Federal Reserve will delay plans to taper its stimulus program in the near-term.
NZD/USD hit 0.8357 on Thursday, the pair’s highest since November 7; the pair subsequently consolidated at 0.8336 by close of trade on Friday, up 0.74% for the day and 1.1% higher for the week.
The pair is likely to find support at 0.8232, the low from November 14 and resistance at 0.8396, the high from November 7.
The U.S. dollar slipped after a report showed that the Federal Reserve’s Empire state manufacturing index fell to -2.21 from 1.52 in October. Economists had forecast a rise to 5.0.
A separate report showed that U.S. industrial production fell 0.1% in October, after rising by 0.7% in September, compared to expectations for a 0.2% increase.
The data came a day after testimony from Federal Reserve Vice Chairwoman Janet Yellen was seen as cementing the view that the bank will keep its USD85 billion-a-month asset purchase program in place until early next year.
Ms. Yellen said it was "imperative" that the Fed does everything in its power to ensure a robust recovery. She said the quantitative easing program would not continue indefinitely but the timescale for reducing it would be data dependent.
The comments came during a Senate confirmation hearing to take over from Ben Bernanke as head of the central bank in February.
Meanwhile, in New Zealand, Reserve Bank of New Zealand Governor Graeme Wheeler said interest rates will start being raised next year, due to the increase in inflation, which is likely to drive the kiwi higher.
The comments came after, in its biannual financial stability report, the central bank highlighted the overvalued housing market as the main threat to the country's financial system.
Data released earlier in the week showed that retail sales rose 0.3% in the third quarter, disappointing expectations for a 0.9% increase. Core retail sales, which exclude automobiles and gas stations, ticked down 0.1% in the last quarter, compared to expectations for a 1.4% rise.
In the week ahead, investors will be closely watching Wednesday’s minutes of the Fed’s most recent policy setting meeting. The U.S. is also to release data on retail sales and consumer prices.
Meanwhile, China is to produce preliminary data on manufacturing activity. The Asian nation is New Zealand's second biggest export partner.
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 Friday as there are no relevant events on this day.
Monday, November 18
The U.S. is to release private sector data on the outlook for the housing sector.
Tuesday, November 19
The U.S. is to release data on the employment cost index, an important inflationary indicator.
Later Tuesday, New Zealand is to publish data on producer price inflation input.
Wednesday, November 20
The U.S. is to release a series of data including a report on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to publish data on consumer inflation, existing home sales and business inventories.
Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
Thursday, November 21
China is to release the preliminary estimate of the HSBC manufacturing index, a leading indicator of economic health.
The U.S. is release data on producer price inflation, as well as the weekly report on initial jobless claims. The U.S. is also to release data manufacturing activity from the Philly Fed.
NZD/USD hit 0.8357 on Thursday, the pair’s highest since November 7; the pair subsequently consolidated at 0.8336 by close of trade on Friday, up 0.74% for the day and 1.1% higher for the week.
The pair is likely to find support at 0.8232, the low from November 14 and resistance at 0.8396, the high from November 7.
The U.S. dollar slipped after a report showed that the Federal Reserve’s Empire state manufacturing index fell to -2.21 from 1.52 in October. Economists had forecast a rise to 5.0.
A separate report showed that U.S. industrial production fell 0.1% in October, after rising by 0.7% in September, compared to expectations for a 0.2% increase.
The data came a day after testimony from Federal Reserve Vice Chairwoman Janet Yellen was seen as cementing the view that the bank will keep its USD85 billion-a-month asset purchase program in place until early next year.
Ms. Yellen said it was "imperative" that the Fed does everything in its power to ensure a robust recovery. She said the quantitative easing program would not continue indefinitely but the timescale for reducing it would be data dependent.
The comments came during a Senate confirmation hearing to take over from Ben Bernanke as head of the central bank in February.
Meanwhile, in New Zealand, Reserve Bank of New Zealand Governor Graeme Wheeler said interest rates will start being raised next year, due to the increase in inflation, which is likely to drive the kiwi higher.
The comments came after, in its biannual financial stability report, the central bank highlighted the overvalued housing market as the main threat to the country's financial system.
Data released earlier in the week showed that retail sales rose 0.3% in the third quarter, disappointing expectations for a 0.9% increase. Core retail sales, which exclude automobiles and gas stations, ticked down 0.1% in the last quarter, compared to expectations for a 1.4% rise.
In the week ahead, investors will be closely watching Wednesday’s minutes of the Fed’s most recent policy setting meeting. The U.S. is also to release data on retail sales and consumer prices.
Meanwhile, China is to produce preliminary data on manufacturing activity. The Asian nation is New Zealand's second biggest export partner.
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 Friday as there are no relevant events on this day.
Monday, November 18
The U.S. is to release private sector data on the outlook for the housing sector.
Tuesday, November 19
The U.S. is to release data on the employment cost index, an important inflationary indicator.
Later Tuesday, New Zealand is to publish data on producer price inflation input.
Wednesday, November 20
The U.S. is to release a series of data including a report on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to publish data on consumer inflation, existing home sales and business inventories.
Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
Thursday, November 21
China is to release the preliminary estimate of the HSBC manufacturing index, a leading indicator of economic health.
The U.S. is release data on producer price inflation, as well as the weekly report on initial jobless claims. The U.S. is also to release data manufacturing activity from the Philly Fed.