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Forex - NZD/USD weekly outlook: October 7 - 11

Published 10/06/2013, 10:10 AM
NZD/USD
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Investing.com - The New Zealand dollar ended Friday’s session at an eight-day high against its U.S. counterpart, as investors continued to monitor negotiations over a U.S. budget impasse that has kept the federal government shut down since October 1.

NZD/USD hit 0.8351 on Friday, the pair’s highest since September 24; the pair subsequently consolidated at 0.8320 by close of trade on Friday, up 0.33% for the day and 0.45% higher for the week.

The pair is likely to find support at 0.8194, the low from October 2 and resistance at 0.8360, the high from September 24.

House Republican leader John Boehner said Friday the House will not vote on a budget bill without conditions and demanded spending cuts in exchange for raising the government's borrowing limit.

Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.

Moody's Investors Service warned that a failure to raise the debt limit would result in a worse outcome for financial markets than a government shutdown.

Friday's highly-anticipated non-farm payrolls report for September was postponed due to the U.S. government shutdown, and no new date was given for the release of the data.

In the week ahead, investors will be looking ahead to Wednesday’s minutes of the Federal Reserve’s most recent policy-setting meeting, amid ongoing uncertainty over when the central bank will begin tapering its USD85 billion a month asset purchase program.

The Fed took markets by surprise last month with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.

Markets will also be watching developments in U.S. budget negotiations.

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, Wednesday and Friday as there are no relevant events on these days.

Tuesday, October 8

New Zealand is to release private sector data on business confidence, a leading indicator of economic health.

Thursday, October 10

New Zealand is to release private sector data on manufacturing activity.

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