Investing.com - The New Zealand dollar ended Friday’s session close to a six-week high against its U.S. counterpart, amid indications the Federal Reserve will keep interest rates at record-low levels for a considerable time.
NZD/USD hit 0.8734 on Wednesday, the pair’s highest since May 6, before subsequently consolidating at 0.8696 by close of trade on Friday, down 0.24% for the day but 0.35% higher for the week.
The pair is likely to find support at 0.8653, the low from June 18 and resistance at 0.8731, the high from June 19.
Concerns over the ongoing Sunni insurgency in Iraq hit market sentiment on Friday, as government forces fought with Sunni militants for control of a 300,000 barrel-per-day refinery in the northeast part of the country, fuelling concerns over a disruption to global supplies.
U.S. President Barack Obama said Thursday he would send 300 members of the special-operations forces to Iraq and added he was prepared to take "targeted" military action later if deemed necessary.
The kiwi rallied to a six-week high against the greenback after the Federal Reserve gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.
The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.
Despite this, the Fed lowered its forecast for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously, due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.
The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.
Elsewhere, in New Zealand, data released earlier in the week showed that New Zealand's economy grew by 1% in the first quarter, compared to expectations for an expansion of 1.2%.
In the coming week, market players will focus on U.S. consumer confidence, durable goods orders and home sales data for further indications on the strength of the economy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 23
China is to publish the preliminary reading of the HSBC manufacturing index.
The U.S. is to release preliminary data on manufacturing activity and private sector data on existing home sales.
Tuesday, June 24
The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.
Wednesday, June 25
The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.
Thursday, June 26
The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.
Friday, June 27
New Zealand is to publish data on the trade balance.
The U.S. is to round up the week with revised data on consumer sentiment.