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Forex - NZD/USD weekly outlook: March 28-April 1

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Forex Pros - Last week saw the New Zealand dollar jump to a one-month high against its U.S. counterpart on Friday, boosted by sharpened risk appetite and after official data showed that the country's economy expanded more-than-expected in the fourth quarter, avoiding a recession.

NZD/USD hit 0.7574 on Friday, the pair's highest since February 22; the pair subsequently consolidated at 0.7531 by close of trade, rallying 3.1% over the week.

The pair was likely to find support at 0.7421, Thursday's low and resistance at 0.7640, the high of February 22.

Statistics New Zealand said that gross domestic product rose 0.2% in the fourth quarter, after contracting 0.2% in the previous quarter. Analysts had expected fourth quarter GDP to expand 0.1%. From a year earlier, the economy grew 0.8%.

Exports, which make up 30% of the economy, increased 2.1%, led by milk, meat and lumber shipments, the report showed. Imports rose 6.6%, the most since the first quarter of 2004, led by purchases of aircraft and tourist spending abroad.

Meanwhile, Reserve Bank of New Zealand Governor Alan Bollard said on Friday that the nation's economy would get a boost from "a very big" construction boom, following the earthquake that struck Christchurch in late February.

Speaking at the Basel III conference in Sydney, Mr. Bollard said that the rebuilding efforts were "likely to add something like 2.5% extra impact on growth" in the second half of 2011.

Last month's magnitude 6.3 quake, which killed more than 160 people in the nation's second largest city of Christchurch, prompted the RBNZ to cut interest rates on March 10 to a record low 2.5%.

In the week ahead the U.S. is to release key data on nonfarm payrolls as well as a closely-watched report on its unemployment rate, while New Zealand is to produce official data on its trade balance and a report on business confidence.

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

Monday

The U.S. is to kick off the week by releasing a flurry of data, with an industry report on pending home sales as well as official data on personal spending, personal income and personal consumption expenditures.

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

Tuesday

The U.S. is to publish data on consumer confidence compiled by the Conference Board as well as industry data on house prices, a leading indicator of the housing industry's health.

Meanwhile, New Zealand is to publish a report on building consents, a leading gauge of future construction activity.

Wednesday

The U.S. is to publish data on private sector payrolls compiled by payroll processing firm ADP, which heads up government data by two days, as well as a report on crude oil stockpiles.

Thursday

The U.S. is to release its key weekly report on initial jobless claims, a leading indicator of overall economic health. The country is also to publish a report on manufacturing activity in the in the Chicago area as well as official data on factory orders and natural gas inventories.

Also Thursday, New Zealand is to publish a report on business confidence, a leading indicator of economic health, as well as data on manufacturing sales.

Friday

The U.S. is to round up the week with a string of data, including a closely watched report on non-farm payrolls, a leading indicator of job creation. The country is also to publish government data on the rate of unemployment and average hourly earnings.

In addition, the country is to release official data on construction spending and total vehicle sales, while the Institute for Supply Management is to publish a report 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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