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Forex - NZD/USD weekly outlook: November 4 - 8

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Shutterstock photo - " The New Zealand dollar ended Friday's session lower against its U.S. counterpart, amid speculation the Federal Reserve could start tapering its bond-buying program sooner-than-expected.

NZD/USD hit 0.8193 on Wednesday, the pair's lowest since September 17; the pair subsequently consolidated at 0.8260 by close of trade on Friday, down 0.05% for the day and 0.22% lower for the week.

The pair is likely to find support at 0.8193, the low from October 30 and resistance at 0.8310, the high from October 31.

The dollar gained ground after the Institute of Supply Management said its manufacturing purchasing managers' index rose to 56.4 in October, the highest since April 2011, from 56.2 in September. Economists had expected the index to tick down to 55.0.

The upbeat data fuelled speculation that the Fed may start tapering its USD85-billion-a-month bond-buying program as soon as next month, after the central bank sounded more optimistic than anticipated in its assessment of the economy on Wednesday.

Fed officials stuck to the view that the economy is expanding "at a moderate pace" and said downside risks were diminishing, sparking speculation the central bank could start tapering stimulus at its December meeting.

The kiwi remained supported following the release of upbeat Chinese manufacturing data. The Asian nation is New Zealand's second biggest export partner.

China's official purchasing managers' index released earlier in the day rose to 51.4 in October, the highest in 18 months, from 51.1 in September.

Meanwhile, in New Zealand, data showed that the ANZ business confidence index ticked down to 53.2 in October, from a reading of 54.1 the previous month.

On Wednesday, the Reserve Bank of New Zealand opted to keep rates at a record low of 2.5%.

In a statement following the decision, RBNZ Governor Graeme Wheeler said, "Sustained strength in the exchange rate that leads to lower inflationary pressure would provide the bank with greater flexibility as to the timing and magnitude of future increases in the OCR."

Traders interpreted those remarks to mean that a rate hike from RBNZ is further off than previously expected.

Market players anticipated the release of key U.S. economic data in the week ahead to help assess the timing for a reduction in the Fed's bond-purchasing program.

On Friday the U.S. is to release the nonfarm payrolls report for October. The U.S. is also to release preliminary data on third quarter economic growth on Thursday.

Employment data out of New Zealand scheduled for Wednesday will also be in focus.

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

Monday, November 4

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

Tuesday, November 5

In the U.S., the Institute of Supply Management is to release a report on service sector activity.

Later Tuesday, New Zealand is to produce a report on the change in the number of people employed, and the unemployment rate, a leading economic indicator.

Thursday, November 7

The U.S. is to publish a preliminary estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims.

Friday, November 8

The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate. offers an extensive set of professional tools for the financial markets.

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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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