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Forex - NZD/USD weekly outlook: July 28 - August 1

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Investing.com -

Investing.com - The New Zealand dollar fell to a six-week low against its U.S. counterpart on Friday, as upbeat U.S. economic data added to speculation that the Federal Reserve will hike interest rates sooner than expected.

NZD/USD hit 0.8537 on Friday, the pair's lowest since June 11, before subsequently consolidating at 0.8555 by close of trade on Friday, down 0.22% for the day and 1.53% lower for the week.

The pair is likely to find support at 0.8516, the low from June 11 and resistance at 0.8623, the high from July 24.

The Commerce Department on Friday reported a rise of 0.7% in orders of long lasting goods such as machinery and electronic products, compared to forecasts of 0.5%.

The data came a day after the U.S. Department of Labor said that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to hit an eight-year low of 284,000.

The data primed market expectations for the Fed to wind down its bond-buying stimulus program around October and raise interest rates in 2015.

Meanwhile, the Reserve Bank of New Zealand raised interest rates by a quarter percentage point to 3.5% earlier in the week, but signaled that rates will not go any higher this year.

Commenting on the decision, RBNZ Governor Graeme Wheeler announced a pause in the country's first round of interest-rate increases this year as the rising New Zealand dollar continues to curb inflation.

Data from the Commodities Futures Trading Commission released Friday showed that speculators decreased their bullish bets on the New Zealand dollar in the week ending July 22.

Net longs totaled 15,132 contracts, down slightly from net longs of 15,453 in the preceding week.

In the week ahead, investors will be focusing on Wednesday's preliminary reading on U.S. second quarter growth, while Friday's nonfarm payrolls report will also be in focus.

Wednesday's Fed statement will also be closely watched for any indications that the central bank is moving closer to raising rates.

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

Monday, July 28

The U.S. is to release data on pending home sales.

Tuesday, July 29

The U.S. is to publish reports on house price inflation and consumer confidence.

Wednesday, July 30

New Zealand is to produce data on building consents.

The U.S. is to release the ADP report on private sector job creation, which leads the government's nonfarm payrolls report by two days. The U.S. is also to publish revised data on second quarter growth.

Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement.

Thursday, July 31

The U.S. is to release the weekly report on initial jobless claims, as well as data on manufacturing activity in the Chicago area.

Friday, August 1

The U.S. is to round up the week with what will be closely watched government data on nonfarm payrolls and the unemployment rate, while the Institute of Supply Management is to release data on manufacturing activity.

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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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