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Forex - NZD/USD weekly outlook: August 22 - 26

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Forexpros - Last week saw the New Zealand dollar fall to a six-day low against its U.S. counterpart on Friday, as mounting concerns over the global economic outlook and lingering fears over the euro zone's sovereign debt crisis prompted investors to shun riskier assets.

NZD/USD hit 0.8170 on Friday, the lowest since August 11; the pair subsequently consolidated at 0.8172 by close of trade, dropping 1.8% on the week, the third consecutive weekly decline.

The pair was likely to find support at 0.8073, the low of August 11 and short-term resistance at 0.8377, Thursday's high.

The kiwi extended losses from the previous session on Friday as heightened fears of a global economic slowdown prompted investors to shun riskier assets, such as stocks and high yielding currencies, and flock to traditional safe havens like the yen, Swiss franc and gold.

The kiwi dropped sharply on Thursday after a flurry of weak U.S. data fuelled speculation the U.S. economic recovery was stalling.

Among the disappointing U.S. economic reports was data on existing home sales and weekly jobless claims, which both came in below market expectations, while an index of manufacturing activity in the Philadelphia-region plunged to the lowest level since March 2009 in August.

Also Thursday, the Wall Street Journal reported that the Federal Reserve Bank of New York was concerned that the euro zone's debt crisis could "eventually hinder the ability of European banks to fund loans and meet other financial obligations in the U.S."

The report fuelled concerns over the health of the region's banking sector and weighed heavily on market sentiment.

Meanwhile, official data released Wednesday showed that producer input prices in New Zealand rose 0.9% in the second quarter after climbing 2.2% in the preceding quarter. Analysts had expected input prices to rise 1.2% in the three months to June.

Looking ahead, investors will be focusing on whether Federal Reserve Chairman Ben Bernanke will drop any hints about such further monetary easing measures when he speaks at an economic symposium in Jackson Hole, Wyoming, on Friday.

Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.

Monday, August 22

The U.S. is to publish data on mortgage delinquencies, a sign of health in the housing market.

Tuesday, August 23

New Zealand is to publish a report on inflation expectations.

Later in the day, the U.S. is to release official data on new home sales, a leading indicator of economic health.

Wednesday, August 24

New Zealand is to publish official data on its trade balance, the difference in value between imported and exported goods.

Meanwhile, the U.S. is to publish government data on durable goods orders, a leading indicator of production. The country is also to publish data on crude oil inventories.

Thursday, August 25

New Zealand is to publish official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Later in the day, the U.S. is to publish government data on initial jobless claims, a leading indicator of economic health.

Thursday is also the first day of the annual global economic symposium in Jackson Hole, Wyoming.

Friday, August 26

The U.S. is to publish preliminary data on GDP, a leading indicator of economic growth, while the University of Michigan is to release revised data on consumer sentiment and inflation expectations.

Meanwhile, Fed Chair Ben Bernanke is to speak at the second day of the economic symposium in Jackson Hole.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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