Forexpros – The New Zealand dollar weakened against its U.S. counterpart on Friday, paring back some of the week’s gains, after disappointing data on Chinese economic growth sparked concerns over the outlook for global growth.
NZD/USD hit 0.8317 on Friday, the pair’s highest since February 3; the pair subsequently consolidated at 0.8227 by close of trade on Friday, still up 0.63% on the week.
The pair is likely to find support at 0.8119, the low of April 10 and resistance at 0.8317, Friday’s high.
The commodity linked New Zealand dollar turned lower on Friday, after official data showed that the Chinese economy grew at the slowest pace in almost three years in the first quarter, fuelling concerns over a slowdown in global growth.
China’s gross domestic product grew by 8.1% in the three months to March, disappointing expectations for an 8.3% increase, after recording an expansion of 8.9% in the fourth quarter.
The weak data underlined concerns over the outlook for the world’s second largest economy after government data earlier in the week showed that Chinese imports declined sharply in March.
China posted a trade surplus of USD5.35 billion last month, as imports grew just 5.3% after increasing by 39.6% in February. China is New Zealand’s second largest export destination.
Elsewhere Friday, risk appetite was hit as concerns over rising Spanish borrowing costs mounted, amid fears that the country’s banks are too dependent on the European Central Bank.
In addition, a member of the ECB’s governing council said that markets were overreacting to concerns about Spain and added that the bank had no reason to resume its bond purchase program to ease pressure on the country’s borrowing costs.
In the week ahead, investors will be looking at Monday’s U.S. data on retail sales, amid concerns that high fuel costs will hit consumer spending. New Zealand is to release official data on consumer prices on Thursday.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, April 16
The U.S. is to release government data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to release a report on manufacturing activity in New York, as well as government data on net long-term securities transactions and business inventories.
Tuesday, April 17
New Zealand is to produce an industry report on house price inflation, an important indicator of demand in the housing sector.
The U.S. is to produce government data on building permits, an excellent gauge of future construction activity, as well as data on housing starts. The country is also to release official data on industrial production and the capacity utilization rate, leading indicators of economic strength.
Wednesday, April 18
The U.S. is to produce government data on crude oil stockpiles.
Thursday, April 19
New Zealand is to publish official data on consumer price inflation, which accounts for a majority of overall inflation.
The U.S. is to produce government data on unemployment claims, followed by industry data on existing home sales and a report on manufacturing activity in the Philadelphia area.
Friday, April 20
The International Monetary Fund is also scheduled to hold the first of two days of meetings in Washington.
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