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Forex - NZD/USD weekly outlook: February 9 - 13

ForexFeb 08, 2015 09:58AM ET
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NZD/USD ends the week up 1.36% - The New Zealand dollar edged lower against its U.S. counterpart on Friday, as stronger than forecast U.S. nonfarm payrolls data bolstered bets that the Federal Reserve will begin to raise rates sooner than previously thought.

NZD/USD hit a session low of 0.7335, before subsequently consolidating at 0.7362 by close of trade, down 0.62% for the day.

The Labor Department reported Friday that the U.S. economy added 257,000 jobs in January, far more than the 234,000 forecast by economists. December’s figure was revised to 329,000 from a previously reported 252,000.

While the unemployment rate ticked up to 5.7% last month from December’s 5.6%, hourly earnings and the participation rate both saw increases in January.

The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to start raising rates from near zero levels as early as June.

Despite Friday's losses, the kiwi still gained 1.36% against the greenback on the week, the first weekly advance in four weeks.

The New Zealand dollar had found support on Wednesday after Reserve Bank of New Zealand Governor Graeme Wheeler said that interest rates will remain on hold for a prolonged period of time because of the economy's strength and low inflation.

Statistics New Zealand said on Tuesday that the number of employed people rose by 1.2% in the last quarter, beating expectations for a 0.8% gain.

The report also showed that New Zealand's unemployment rate rose to 5.7% in the fourth quarter of 2014 from 5.4% in the three months to September.

Elsewhere, concerns over Greek debt negotiations continued to weigh on market sentiment.

Standard and Poor’s downgraded Greece to B- from B late Friday, one notch above default, and kept the outlook at "negative", indicating that further ratings cuts are possible.

In the week ahead, the economic calendar is light, but the U.S. is to release what will be closely watched data on retail sales and consumer sentiment on Thursday and Friday respectively.

Over the weekend, China reported a trade surplus of $60.0 billion in January, compared to expectations for $48.9 billion and up from a surplus of $49.6 in December.

Exports slumped 3.3% from a year earlier last month, missing expectations for a 6.3% increase, while imports tumbled 19.9%, much worse than forecasts for a decline of 3.0%.

The Asian nation is New Zealand's second-largest trade partner.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Wednesday as there are no relevant events on these days.

Tuesday, February 10

China is to report on consumer and producer price inflation.

Thursday, February 12

The U.S. is to release reports on retail sales and initial jobless claims.

Friday, February 13

The U.S. is to round up the week with preliminary data on consumer sentiment.

Forex - NZD/USD weekly outlook: February 9 - 13

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