Investing.com - The New Zealand dollar bounced off a two-week low against its U.S. counterpart on Friday, as disappointing U.S. housing data dampened demand for the greenback.
NZD/USD hit a daily low of 0.7801 on Friday, the weakest level since October 8, before subsequently consolidating at 0.7855 by close of trade on Friday, up 0.42% for the day but still 0.78% lower for the week.
The pair is likely to find support at 0.7782, the low from October 8, and resistance at 0.7928, the high from October 23.
The dollar came under pressure after official data showed that U.S. new home sales rose 0.2% last month to 467,000 units, below expectations for an increase to 470,000 units.
August's figure was downwardly revised to a 15.3% climb to 466,000 units from a previously estimated 18.0% jump to 504,000 units.
Despite Friday's disappointing housing data, investors remained confident in the U.S. economic recovery, fuelling speculation that the Federal Reserve could hike interest rates sooner than expected.
The kiwi slumped to a two-week low earlier in the session after official data on Thursday showed that consumer price inflation in New Zealand rose 0.3% in the third quarter, below expectations for an increase of 0.5%.
The data fuelled speculation that the Reserve Bank of New Zealand could delay any potential rate hikes.
Data from the Commodities Futures Trading Commission released Friday showed that speculators scaled back their bearish bets on the New Zealand dollar in the week ending October 21.
Net shorts totaled 2,332 contracts, compared to net shorts of 2,384 in the preceding week.
In the week ahead investors will be looking ahead to the outcome of Wednesday’s Federal Reserve meeting amid expectations that it will wind up asset purchases under its third round of quantitative easing.
Investors will be scrutinizing the Fed statement for further indications on how soon interest rates could start to rise.
A policy decision by the Reserve Bank of New Zealand will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 27
The U.S. is to publish an industry report on pending home sales.
Tuesday, October 28
The U.S. is to release data on durable goods orders and a report by the Conference Board on consumer confidence.
Wednesday, October 29
New Zealand is to release private sector data on business confidence.
The Federal Reserve is to announce its federal funds rate and publish its rate statement.
Later Wednesday, the Reserve Bank of New Zealand is to announce its official cash rate and publish its rate statement.
Thursday, October 30
The U.S. is to publish revised data on third quarter GDP, as well as the weekly report on initial jobless claims. Later in the day, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.
Friday, October 31
New Zealand is to release data on building consents.
The U.S. is to round up the week with data on personal income and expenditure as well as revised data on consumer sentiment and a report on business activity in the Chicago region.