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Forex - NZD/USD weekly outlook: May 9-13

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Forex Pros - Last week saw the New Zealand dollar retreat from a three-year high against its U.S. counterpart, posting its first weekly decline in seven weeks as a sharp selloff in commodities and a drop in risk sentiment weighed on the commodity-linked currency.

NZD/USD hit 0.7813 on Thursday, the pair's lowest since April 12; the pair subsequently consolidated at 0.7903 by close of trade, dropping 2.3% over the week.

The pair was likely to find support at 0.7813, Thursday's low and resistance at 0.8064, the high of May 3.

The death of Osama bin Laden on Monday was the catalyst for a broad selloff in commodities, which continued after the European Central Bank indicated on Thursday that interest rates could remain on hold next month.

Silver futures suffered their worst weekly loss since 1980, plummeting 25.9% over the week, while oil prices tumbled 13.5%, its biggest weekly decline since December 2008.

The kiwi shrugged off data on Wednesday showing that New Zealand's jobless rate dipped to 6.6% in the first quarter, as seasonally adjusted total employment rose by 1.4%. Economists had expected the jobless rate to remain unchanged at 6.7%.

The kiwi pared losses on Friday, rebounding from a three-week low as commodity prices regained ground and after official data showed that U.S. nonfarm payrolls rose by 244,000 in April, as the private sector posted the strongest employment gain in five years.

A separate report showed that the U.S. unemployment rate rose to 9.0% last month from 8.8% in March. It was the first increase in the jobless rate since November, when it hit 9.8%. Analysts had expected that payrolls would rise by 185,000 and that the jobless rate would remain unchanged at 8.8%.

In the week ahead, investors will be looking towards U.S. data on retail sales and inflation to gauge the strength of the U.S. economic recovery while the Reserve Bank of New Zealand is to publish its financial stability report.

Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, May 10

The U.S. is to release official data on import prices, an important inflationary indicator as well as data on economic optimism and wholesale inventories.

Meanwhile, the Reserve Bank of New Zealand is to publish its financial stability report, which provides insights into the bank's view of inflation, growth, and other economic conditions that will affect interest rates in the future.

Wednesday, May 11

The U.S. is to publish official data on its trade balance, the difference in value between imported and exported goods and services. In addition, the country is to publish government data on crude oil inventories and the federal budget balance.

New Zealand is to produce a report on manufacturing activity as well as on food price inflation.

Thursday, May 12

The U.S. is to publish a weekly report on initial jobless claims as well as official data on producer price inflation, a leading indicator of consumer inflation. The country is also to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Later in the day, Federal Reserve Chairman Ben Bernanke is to testify before the Senate Banking Committee in Washington.

Friday, May 13

The U.S. is to round up the week with official data on consumer price inflation while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.

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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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