Investing.com - The New Zealand ended Friday’s session close to a two-and-a-half year high, amid indications the domestic economy is gaining momentum, while hopes for fresh stimulus measures from China also supported gains.
NZD/USD rose to 0.8697 on Friday, the pair’s highest since August 2, 2011, before subsequently consolidating at 0.8656 by close of trade on Friday, down 0.18% for the day but still 1.38% higher for the week.
The pair is likely to find support at 0.8590, the low from March 27 and resistance at 0.8697, the high from March 28.
The kiwi climbed to the highest level since August 2011 on Friday after China's premier Li Keqiang said policymakers are prepared to do more to shore up the cooling economy.
The remarks helped ease concerns over recent signs of a slowdown in the world’s second-largest economy.
The New Zealand dollar remained supported after data released earlier in the week showed that New Zealand’s trade surplus rose sharply in February.
The kiwi received an additional boost after Reserve Bank Deputy Governor Grant Spencer indicated that the bank could remove measures to cool the housing market, which would allow inflation to rise.
Meanwhile, in the U.S., data on Friday showed that U.S. consumer spending rose 0.3% last month after a downwardly revised gain of 0.2% in January
A separate report showed that the University of Michigan’s consumer sentiment index slipped to 80.0 in March, down from 81.6 the month before. It was higher than the preliminary March reading of 79.9 but below forecasts of 80.5.
On Thursday, economic reports showed that U.S. jobless claims fell to their lowest level since late November last week, while U.S. fourth quarter growth was revised higher.
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 25.
Net longs totaled 18,213 contracts as of last week, up 13.5% from net longs of 15,751 contracts in the previous week.
In the week ahead, investors will be looking to Friday’s U.S. nonfarm payrolls report for March for further indications on the strength of the labor market.
Attention will also turn to the release of Chinese manufacturing data due Tuesday. The Asian nation is New Zealand's second biggest export partner.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 31
New Zealand is to produce private sector data on business confidence.
Tuesday, April 1
China is to release data on manufacturing activity.
Later Tuesday, the Institute of Supply Management is to publish a report on U.S. manufacturing growth.
Wednesday, April 2
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.
Thursday, April 3
China is to produce data on service sector activity.
Later in the day, the U.S. is to publish data on the trade balance and the weekly report on initial jobless claims. Meanwhile, the ISM is to publish a report service sector activity.
Friday, April 4
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.