Investing.com - The New Zealand dollar rallied to a three-month high against its U.S. counterpart on Friday, as investors increased bets that the Federal Reserve will hold off on raising interest rates until later this year after a recent run of soft economic data dampened optimism on the recovery.
AUD/USD hit 0.7741 on Friday, the pair's strongest level since January 20, before subsequently consolidating at 0.7688 by close of trade on Friday, up 0.21% for the day.
For the week, the pair climbed 1.94% as a recent string of disappointing data fuelled concerns over the strength of the U.S. economy and sparked speculation that the Fed could delay hiking interest rates until late 2015, instead of tightening midyear.
The Labor Department reported Friday that U.S. inflation edged up 0.2% last month, matching a similar gain in February. On a year-over-year basis, consumer prices dipped 0.1% in March after remaining flat in February.
Core consumer prices, which exclude food and energy costs increased 0.2% in March for an annual increase of 1.8%, the largest since October.
The report came after data earlier in the week showed that U.S. retail sales for March came in below expectations. Another report, showing a larger-than-forecast drop in industrial output pointed to a slowdown the first quarter.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.27% on Friday to hit 97.62 by close of trade. The index ended the week down 1.9%.
In the week ahead, investors will be looking ahead to reports on the U.S. housing sector and data on durable goods orders for further indications on the strength of the recovery.
Market players are also looking ahead to New Zealand inflation data due on Monday.
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 Tuesday as there is no relevant data on this day.
Monday, April 20
New Zealand is to release data on consumer price inflation.
Wednesday, April 22
The U.S. is to release data on existing home sales.
Thursday, April 23
China is to release private sector data on manufacturing activity. The Asian nation is New Zealand's second largest trade partner.
Later Thursday, the U.S. is to report in initial jobless claims and new home sales.
Friday, April 24
The U.S. is to round up the week with a report on durable goods orders.