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Forex - NZD/USD weekly outlook: June 20-24

Published 06/19/2011, 09:41 AM
NZD/USD
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Investing.com – Last week saw the New Zealand dollar rebound from a three-week low against its U.S. counterpart on Friday, as risk appetite improved amid renewed hopes for a solution to Greece’s ongoing debt crisis.

NZD/USD hit 0.7971 on Thursday, the pair’s lowest since May 26; the pair subsequently consolidated at 0.8126 by close of trade on Friday, slumping 0.89% over the week.

The pair was likely to find support at 0.7971, Thursday’s low and resistance at 0.8206, Wednesday’s high.

Following a meeting with French President Nicolas Sarkozy on Friday, German Chancellor Angela Merkel dropped demands that bondholders should share the burden of a second Greek bailout package and signaled support for a voluntary rollover of Greek debt.    

Mounting fears that the debt-laden country was close to defaulting on its sovereign debt pressured commodity prices and drove the kiwi to a three-week low on Thursday.

The kiwi fell sharply on Wednesday, as Greek sovereign debt issues overshadowed data showing that domestic retail sales rose for the first time in three quarters.

Statistics New Zealand said retail sales rose 0.9% in the first quarter, compared with expectations for a 1.0% increase, after declining by 0.4% in the previous quarter.

The kiwi was broadly weaker on Monday after a series of aftershocks hit the south island city of Christchurch, raising concerns over the impact of the tremors on New Zealand’s economic recovery just four months after an earthquake killed 180 people in the same city.

In the week ahead, the Federal Reserve is to hold its policy setting meeting, which will be followed by a closely watched press conference by Fed Chairman Ben Bernanke. Investors are hoping that Bernanke will shed some light on the banks view of the need for further monetary easing.

Also next week, New Zealand is to publish a report on its current account.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 20

New Zealand is to release a report on manufacturing sales, a leading indicator of economic health.

Tuesday, June 21

The U.S. is to release a report on existing home sales, a leading indicator of health in the housing sector.

Wednesday, June 22

New Zealand is to publish official data on its current account, as well as a report on credit card spending.

Later Wednesday, the Federal Reserve is to announce its federal funds rate. The announcement will be followed by a press conference to discuss the bank’s rate statement.

Thursday, June 23

The U.S. is to publish government data on initial jobless claims, as well as official data on new home sales, both leading indicators of economic health.

Friday, June 24

The U.S. is to round up the week with official data on durable goods orders, a leading indicator of production, as well revised data on first quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy’s health.

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