Investing.com - The New Zealand dollar fell to a one-week low
against its U.S. counterpart on Friday, following comments from
Reserve Bank of New Zealand Deputy Governor Grant Spencer.
NZD/USD hit 0.8603 on Friday, the pair's lowest since May 2,
before subsequently consolidating at 0.8612 by close of trade, down
0.4% for the day and 0.6% lower for the week.
The pair is likely to find support at 0.8591, the low from May 2
and resistance at 0.8670, the high from May 8.
RBNZ Deputy Governor Spencer said Friday that the high exchange
rate is a cause for concern. He added that housing market prices
and the exchange rate are important variables for the pace and
timing of interest rate hikes.
"A big uncertainty is the future path of the exchange rate,
which has a major bearing on traded goods prices and overall
economic activity," he said. "The more downward pressure that the
exchange rate exerts on prices and activity, the less pressure will
need to be exerted by interest rates."
The RBNZ has raised the official cash rate by 25 basis points
twice since March to 3.00% now.
On Wednesday, RBNZ Governor Graeme Wheeler warned against the
Kiwi's current strength, saying that "it would become more
opportune for the Reserve Bank to intervene in the currency market
to sell New Zealand dollars", in the face of worsening
In addition, official data showed that the number of employed
people in New Zealand rose by 0.9% in the first quarter, beating
expectations for a 0.6% increase, after a 1.1% gain in the three
months to December.
The report also showed that New Zealand's unemployment rate
remained unchanged at 6.0% in the last quarter, disappointing
expectations for a downtick to 5.9%.
Meanwhile, the greenback remained under pressure after Federal
Reserve Chair Janet Yellen said Wednesday that a high degree of
monetary accommodation remains warranted given the slack in the
Data from the Commodities Futures Trading Commission released
Friday showed that speculators increased their bullish bets on the
New Zealand dollar in the week ending May 6.
Net longs totaled 20,693 contracts as of last week, compared to
net longs of 18,480 contracts in the previous week.
In the week ahead, investors will be looking to U.S. data on
retail sales, consumer prices and consumer sentiment for further
indications on the strength of the economy and the need for
Ahead of the coming week, Investing.com has compiled a list of
these and other significant events likely to affect the
Monday, May 12
The U.S. is to publish data on the federal budget balance.
Tuesday, May 13
China is to release data on industrial production and fixed
asset investment. The Asian nation is New Zealand's second largest
The U.S. is to produce data on retail sales, as well as reports
on import prices and business inventories.
Wednesday, May 14
The RBNZ is to publish its bi-annual financial stability report.
Governor Graeme Wheeler is to hold a press conference to discuss
the report. Meanwhile New Zealand is to release data on retail
Later Wednesday, the U.S. is to release data on producer price
Thursday, May 15
New Zealand is to release its annual budget statement, as well
as private sector data on manufacturing activity.
The U.S. is to release data on initial jobless claims, consumer
inflation and industrial production, as well as a report on
manufacturing activity in the Philadelphia region.
Friday, May 16
The U.S. is to round up the week with reports on building
permits and housing starts, and a preliminary reading on consumer
sentiment from the University of Michigan.
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