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

Published 06/08/2014, 09:44 AM
NZD/USD little changed to end the week

Investing.com - The New Zealand dollar rose to a seven-day high against its U.S. counterpart on Friday, before paring gains to end little changed after the closely-watched U.S. nonfarm payrolls report for May yielded no surprises.

NZD/USD hit 0.8554 on Friday, the pair’s highest since May 28, before subsequently consolidating at 0.8500 by close of trade on Friday, up 0.01% for the day and flat for the week.

The pair is likely to find support at 0.8420, the low from June 5 and resistance at 0.8554, the high from June 6.

The Department of Labor said Friday that the U.S. economy added 217,000 jobs last month, just under expectations for jobs growth of 218,000. The unemployment rate remained steady at a five-and-a-half year low of 6.3%.

The data disappointed some market expectations for a more robust reading but indicated that the U.S. economy continued to shake off the effects of a weather-related slowdown over the winter, bolstering the outlook for the broader economic recovery.

The kiwi rallied along with other risk-sensitive assets on Thursday after the European Central Bank unveiled a package of measures to avert the threat of persistently low inflation in the euro area.

The ECB cut the main refinancing rate in the euro area to a record low 0.15% and imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses.

Data from the Commodities Futures Trading Commission released Friday showed that speculators modestly decreased their bullish bets on the New Zealand dollar in the week ending June 3.

Net longs totaled 17,531 contracts as of last week, compared to net longs of 17,994 contracts in the previous week.

In the week ahead, investors will be looking ahead to Thursday’s U.S. retail sales report for May for further indications on the strength of the economic recovery.

The outcome of a monetary policy meeting 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. The guide skips Monday and Wednesday, as there are no major events on these days.

Tuesday, June 10

China is to produce data on consumer and producer prices. The Asian nation is New Zealand’s second-largest trade partner.

Thursday, June 12

The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.

The central bank is also to hold a press conference to discuss the monetary policy decision.

Later in the day, the U.S. is to release the weekly report on initial jobless claims, in addition to data on retail sales and import prices.

Friday, June 13

New Zealand is to release private sector data on manufacturing activity.

China is to release data on industrial production and fixed asset investment.

The U.S. is to round up the week with data on producer price inflation and preliminary data on consumer sentiment from the University of Michigan.

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