Investing.com - The New Zealand dollar rose to a nine-day high against its U.S. counterpart on Friday, as a mixed U.S. employment report forced investors to recalibrate their assumptions about the future course of the Federal Reserve's monetary policy.
NZD/USD rose to 0.8297 on Friday, the pair’s highest January 29, before subsequently consolidating at 0.8296 by close of trade, up 0.58% for the day and 2.5% higher for the week.
The pair is likely to find support at 0.8211, Friday’s low and resistance at 0.8303, the high from January 28.
Data on Friday showed that the U.S. economy added 113,000 jobs in January, well below expectations for jobs growth of 185,000, after December's lackluster gain of 75,000 jobs.
It was the weakest two-month stretch of job creation in three years as inclement weather contributed to a slowdown in hiring.
Yet the report also showed that the number of people participating in the labor force edged up to 63% from a 30-year low of 62.8% last month, while the unemployment rate unexpectedly ticked down to a five year low 6.6% from 6.7% in December.
The Fed said it will keep a close eye on economic indicators before deciding to wind down its stimulus program even further. The central bank tapered its monthly asset purchase program by another USD10 billion to USD65 billion a month at its last policy meeting.
Meanwhile, the kiwi drew additional support amid growing expectations for a near-term rate hike by the Reserve Bank of New Zealand. The RBNZ indicated last week that rates are likely to rise in March.
Data released on Wednesday showed that the number of people employed in New Zealand the three months to December increased by 1.1% or 24,000, after an additional 28,000 jobs were created in the third quarter. Market expectations had been for an increase of 0.6%.
The unemployment rate fell to 6.0% in the fourth quarter from 6.2% in the previous quarter, in line with market expectations.
Data from the Commodities Futures Trading Commission released Friday showed that speculators reduced their bullish bets on the New Zealand dollar in the week ending February 4.
Net longs totaled 8,032 contracts as of last week, down 17% from net longs of 9,685 contracts in the previous week.
In the week ahead, Fed Chair Janet Yellen is to testify on the central bank’s semiannual monetary policy report in Washington. Her comments will be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Wednesday as there are no relevant events on these days.
Tuesday, February 11
Federal Reserve Chair Janet Yellen is to testify on the bank’s semiannual monetary policy report before the House Financial Services Committee, in Washington.
Thursday, February 13
The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The nation is also to release the weekly report on initial jobless claims.
Federal Reserve Chair Janet Yellen is to testify on the bank’s semiannual monetary policy report before the House Financial Services Committee, in Washington.
Friday, February 14
The U.S. is to wrap up the week with the closely watched preliminary reading of the University of Michigan consumer sentiment index. The U.S. is also to release data on import prices and industrial production.