Investing.com - The New Zealand dollar fell to a two-week low against its U.S. counterpart on Friday, as concerns over tightening liquidity conditions in China and fears over the weakening U.S. economic outlook dampened demand for riskier assets.
NZD/USD hit 0.8274 on Friday, the pair’s lowest since October 11; the pair subsequently consolidated at 0.8279 by close of trade on Friday, down 0.91% for the day and 2.68% lower for the week.
The pair is likely to find support at 0.8232, the low from October 10 and resistance at 0.8446, the high from October 24.
Risk appetite weakened after Chinese interbank lending rates surged to the highest level since June on Thursday, renewing fears over a cash crunch in the country’s financial system
Concerns over tightening liquidity conditions overshadowed stronger-than-expected Chinese manufacturing data.
Data released on Thursday showed that China’s HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.
China is New Zealand's second biggest export partner.
Meanwhile, in the U.S., data on Friday showed that core durable goods orders unexpectedly fell 0.1% in September, the third consecutively decline.
A separate report showed that the University of Michigan U.S. consumer sentiment index was revised down to a 10-month low in October.
The disappointing data underlined expectations that the Federal Reserve will delay tapering its stimulus program until next year amid concerns over the impact of the 16-day U.S. government shutdown on the economic recovery.
In the week ahead, investors will be focused on the outcome of Wednesday’s Fed policy setting meeting. The central bank is expected to keep its USD85 billion-a-month asset purchase program on track.
Wednesday’s monetary policy statement by the Reserve Bank of New Zealand will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 28
The U.S. is to produce reports on industrial production and the capacity utilization rate, as well as private sector data on pending home sales.
Tuesday, October 29
The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish data on producer price inflation and a report on consumer confidence, a leading economic indicator.
Wednesday, October 30
The U.S. is to release the ADP report on nonfarm payrolls and official data on consumer price inflation.
Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke.
The RBNZ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Thursday, October 31
New Zealand is to publish data on building consents, a leading indicator of future construction activity, as well as a private sector report on business confidence.
The U.S. is to release data on initial jobless claims and a report on manufacturing activity in the Chicago region.
Friday, November 1
China is to produce official data on manufacturing activity, a leading indicator of economic health. Beijing is also to release the revised reading of the HSBC manufacturing index.
The U.S. is to round up the week with a report from the Institute of Supply Management on manufacturing activity.
NZD/USD hit 0.8274 on Friday, the pair’s lowest since October 11; the pair subsequently consolidated at 0.8279 by close of trade on Friday, down 0.91% for the day and 2.68% lower for the week.
The pair is likely to find support at 0.8232, the low from October 10 and resistance at 0.8446, the high from October 24.
Risk appetite weakened after Chinese interbank lending rates surged to the highest level since June on Thursday, renewing fears over a cash crunch in the country’s financial system
Concerns over tightening liquidity conditions overshadowed stronger-than-expected Chinese manufacturing data.
Data released on Thursday showed that China’s HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.
China is New Zealand's second biggest export partner.
Meanwhile, in the U.S., data on Friday showed that core durable goods orders unexpectedly fell 0.1% in September, the third consecutively decline.
A separate report showed that the University of Michigan U.S. consumer sentiment index was revised down to a 10-month low in October.
The disappointing data underlined expectations that the Federal Reserve will delay tapering its stimulus program until next year amid concerns over the impact of the 16-day U.S. government shutdown on the economic recovery.
In the week ahead, investors will be focused on the outcome of Wednesday’s Fed policy setting meeting. The central bank is expected to keep its USD85 billion-a-month asset purchase program on track.
Wednesday’s monetary policy statement by the Reserve Bank of New Zealand will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 28
The U.S. is to produce reports on industrial production and the capacity utilization rate, as well as private sector data on pending home sales.
Tuesday, October 29
The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish data on producer price inflation and a report on consumer confidence, a leading economic indicator.
Wednesday, October 30
The U.S. is to release the ADP report on nonfarm payrolls and official data on consumer price inflation.
Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke.
The RBNZ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Thursday, October 31
New Zealand is to publish data on building consents, a leading indicator of future construction activity, as well as a private sector report on business confidence.
The U.S. is to release data on initial jobless claims and a report on manufacturing activity in the Chicago region.
Friday, November 1
China is to produce official data on manufacturing activity, a leading indicator of economic health. Beijing is also to release the revised reading of the HSBC manufacturing index.
The U.S. is to round up the week with a report from the Institute of Supply Management on manufacturing activity.