Investing.com - The New Zealand dollar bounced off a one-week low against its U.S. counterpart on Friday to end the session higher, as demand for the greenback was dampened following the release of disappointing U.S. nonfarm payrolls data.
NZD/USD fell to 0.8207 on Friday, the pair’s lowest since January 3, before turning higher to subsequently consolidate at 0.8303 by close of trade, up 0.59% for the day and 0.46% higher for the week.
The pair is likely to find support at 0.8207, Friday’s low and resistance at 0.8317, the high from January 8.
The U.S. economy added 74,000 jobs in December, the Labor Department said, the smallest increase since January 2011 and well below expectations for 196,000 new jobs.
The unemployment rate fell to a five-year low of 6.7% from 7% in November, but this was due in part to people dropping out of the labor force. The labor participation rate fell to an almost 35-year low of 62.8%.
The disappointing data cooled expectations that the Fed would cut its stimulus program again this month. The central bank cited a stronger labor market in its decision to taper its asset purchase program by USD10 billion in December to USD75 billion-a-month.
Minutes of the Fed’s December meeting released earlier in the week showed that officials were keen to stress that further reductions in stimulus were not on a “preset course” and would be undertaken in “measured” steps. The central bank is scheduled to meet January 28-29 to review the economy and assess policy.
Market players shrugged off data showing that China's trade surplus narrowed to USD25.6 billion in December, from USD33.8 billion the previous month, compared to expectations for a surplus of USD31.1 billion. The Asian nation is New Zealand’s second largest trade partner.
The CFTC Commitments of Traders report for the week ending January 7 showed that speculators boosted their net long kiwi positions by 605 contracts to 14,803, while reducing net short positions by 554 contracts to 6,937.
In the week ahead, investors will be closely watching U.S. data on retail sales, inflation and consumer sentiment, as well as speeches by two Federal Reserve officials on Tuesday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 13
New Zealand is to release private sector data on business confidence.
Tuesday, January 14
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 data on import prices and business inventories.
Also Tuesday, Federal Reserve Bank of Philadelphia President Charles Plosser and Dallas Fed President Richard Fisher are to speak.
Wednesday, January 15
The U.S. is to release data on producer price inflation and a report on manufacturing activity in the New York region.
Thursday, January 16
The U.S. is to publish reports on consumer price inflation and initial jobless claims, in addition to data on manufacturing activity in Philadelphia. Meanwhile, Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington.
Friday, January 17
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 building permits, housing starts and industrial production.