Forexpros – Last week saw the New Zealand dollar drop to a more than one-month low against its U.S. counterpart before trimming some of the week’s losses as positive signs on the handling of Greece and Italy’s financial woes boosted demand for riskier assets.
NZD/USD hit 0.7730 on Thursday, the pair’s lowest since October 10; the pair subsequently consolidated at 0.7847 by close of trade on Friday, sliding 1.52% over the week.
The pair is likely to find support at 0.7676, the low of October 10 and resistance at 0.7967, the high of November 3.
The kiwi found support on Friday, as risk sentiment improved after Italy’s Parliament approved an amendment to the country’s 2012 budget, paving the way for the resignation of Prime Minister Silvio Berlusconi on Saturday.
Meanwhile, incoming Greek Prime Minister Lucas Papademos and his cabinet were sworn in. Papademos will implement the country’s latest EUR130 billion bailout before leading the country to early elections.
In the U.S., preliminary data showing that consumer sentiment rose to its highest level in five months this month contributed to stronger risk appetite.
The University of Michigan’s consumer sentiment index rose to a seasonally adjusted 64.2, from 60.9 in October, outstripping forecasts for an increase to 61.0.
The New Zealand dollar tumbled against the greenback on Wednesday as yields on 10-year Italian bonds rose above the 7% threshold, a level widely considered unsustainable for continued borrowing, weighing on market sentiment.
In the week ahead, investors will continue to closely monitor developments in the euro zone as talks on the formation of an emergency government in Italy get started. The euro zone is also to publish preliminary data on third quarter growth, which will be closely watched to gauge the strength of the region’s economy.
Also next week, the U.S. is to release data on retail sales, housing and inflation, while New Zealand is to publish official data on retail sales and producer price inflation input.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday, as there are no relevant events on this day.
Monday, November 14
New Zealand is to release official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
Tuesday, November 15
The U.S. is to produce a flurry of economic data with reports on retail sales, producer price inflation, business inventories and a report on manufacturing activity in New York State.
Wednesday, November 16
New Zealand is to publish official data on producer price inflation input, a leading indicator of economic health.
Later in the day, the U.S. is to publish data on consumer inflation, as well as data on industrial production, the capacity utilization rate, crude oil stockpiles and the balance of foreign and domestic investment in long-term securities.
Thursday, November 17
The U.S. is to publish its weekly report on initial jobless claims, as well as data on building permits, an excellent gauge of future construction activity and housing starts. The country is also to release a report on manufacturing activity in Philadelphia, a leading indicator of economic health.
Forexpros
