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Forex - NZD/USD weekly outlook: July 1 - 5

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Shutterstock photo - The New Zealand dollar ended Friday's session close to a one-year low against its U.S. counterpart, weighed down by growing expectations the Federal Reserve will start to unwind its asset purchase program this year following the release of better-than-expected U.S. consumer sentiment data.

NZD/USD hit 0.7706 on Friday, the pair's lowest since June 25; the pair subsequently consolidated at 0.7736 by close of trade on Friday, down 0.67% for the day but little changed for the week.

The pair is likely to find support at 0.7682, the low from June 24 and a 12-month low and resistance at 0.7789, June 24's high.

The University of Michigan's consumer sentiment index rose to 84.1 from a preliminary reading of 82.7, nearing the almost six-year high reached in May.

The dollar was also boosted after Fed Governor Jeremy Stein indicated that the bank may begin tapering its USD85 billion-a-month asset purchase program in September.

Stein said the decision to taper bond buying must be based on economic progress since the Fed implemented its easing program and should not be "excessively sensitive" to economic data releases in the weeks preceding the decision.

Meanwhile, in New Zealand, official data released Friday showed that new building permits increased 1.3% to a seasonally adjusted 1,818 last month.

On Thursday a government report showed that the country's trade surplus narrowed unexpectedly in May, falling to NZD71 million from a surplus of NZD174 million the previous month.

Analysts had expected the trade surplus to widen to NZD400 million last month.

A separate report showed that the ANZ business confidence index for New Zealand rose to 50.1 this month, from a reading of 41.8 in May.

Market players now looked ahead to Friday's highly-anticipated U.S. nonfarm payrolls data for indications of how the recovery in the U.S. labor market is progressing.

Any improvement in the U.S. economy was likely to reinforce the view that the Federal Reserve will begin to taper its bond purchase program in the coming months.

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

Monday, July 1

China is to release both official and private sector reports on manufacturing activity, leading indicators of economic health. The Asian nation is New Zealand's second biggest export partner.

In the U.S., the Institute of Supply Management is to produce a report on manufacturing activity, a leading economic indicator.

Tuesday, July 2

The U.S. is to release official data on factory orders, a leading indicator of production.

Wednesday, July 3

The U.S. is to release the ADP report on nonfarm payrolls, which leads the closely watched government report by two days. The U.S. is also to release the weekly government report on initial jobless claims, one day ahead of schedule, as well as data on the trade balance.

In addition, the ISM is to produce a report on U.S. service sector activity.

Thursday, July 4

Markets in the U.S. are to remain closed for the Independence Day holiday.

Friday, July 5

The U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average hourly earnings. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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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