Investing.com - The New Zealand rose to a more than four-month high against its U.S. counterpart on Friday before turning modestly lower, as the release of upbeat U.S. nonfarm payrolls data underlined the view that the Federal Reserve will maintain the current pace of reductions to its stimulus program.
NZD/USD rose to 0.8524 on Friday, the pair’s highest since October 22, before subsequently consolidating at 0.8470 by close of trade, down 0.06% for the day but still 1.01% higher for the week.
The pair is likely to find support at 0.8405, the low from March 6 and resistance at 0.8524, the high from March 7.
The Labor Department said Friday that the U.S. economy added 175,000 jobs in February, well above expectations for 149,000 new jobs. The unemployment rate ticked up to 6.7% from 6.6% in January, as more people joined the workforce.
The upbeat jobs report eased concerns over soft U.S. economic data seen in the past few months and underlined the view that the Fed is likely to continue to gradually taper its bond-buying program.
Meanwhile, the kiwi drew support from growing expectations for a near-term rate hike by the Reserve Bank of New Zealand. The RBNZ indicated previously that rates are likely to rise in March.
Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the New Zealand dollar in the week ending March 4.
Net longs totaled 13,432 contracts as of last week, up 18.2% from net longs of 10,982 contracts in the previous week.
In the week ahead, investors will be anticipating what will be closely-watched data on U.S. retail sales and consumer sentiment for further indications of the strength of the economy and the future course of monetary policy.
A rate announcement by the RBNZ will also be in focus.
Market players will also continue to gauge the health of China’s economy after data released over the weekend showed that Chinese exports collapsed 18.1% in February from a year earlier, disappointing expectations for a 6.8% increase.
The significant decline in China’s exports led to a deficit of $22.98 billion last month, compared to a surplus of $31.86 billion in January. Analysts had expected a surplus of $14.5 billion in February.
A separate report showed that consumer price inflation in China rose 2% in February from a year earlier, in line with expectations, while producer price inflation declined 2%, compared to forecasts for a 1.9% drop.
The Asian nation is New Zealand’s second largest trade partner.
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 Tuesday as there is no relevant data on these days.
Wednesday, March 12
The RBNZ is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision. The announcement is to be followed by a press conference.
Thursday, March 13
RBNZ Governor Graeme Wheeler is to testify before the Finance and Expenditure Select Committee, in Wellington.
The U.S. is to release data on retail sales and import prices, in addition to the weekly government report on initial jobless claims.
Friday, March 14
The U.S. is to round up the week with data on producer price inflation and preliminary data from the University of Michigan on consumer sentiment.