Forexpros – The New Zealand dollar turned higher against its U.S. counterpart on Friday, paring some of the week’s losses after the International Monetary Fund boosted its capacity to fight the euro zone debt crisis, supporting risk appetite.
NZD/USD hit 0.8120 on Thursday, the pair’s lowest since April 10; the pair subsequently consolidated at 0.8182 by close of trade on Friday, shedding 0.76% over the week.
The pair is likely to find support at 0.8120, Thursday’s low and resistance at 0.8278, the high of April 12.
Markets remained jittery amid concerns that Spain will be the next country in the euro zone to require a bailout, as the government attempt to slash one of the largest deficits in the bloc, in the face of a looming recession.
An auction of 10-year Spanish government bonds on Thursday met with reasonably solid demand but saw the country’s borrowing costs push closer to the 6% level.
In the U.S., data on Thursday showed that manufacturing activity in the Philadelphia-region expanded at a slower rate than expected in April and U.S. existing home sales declined unexpectedly last month.
The data came after a government report showing that the number of people who filed for unemployment assistance in the U.S. in the week ending April 14 fell less-than-expected, while the previous week’s figure was revised higher.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 14 fell by 2,000 to a seasonally adjusted 386,000, disappointing expectations for a decline of 18,000 to 370,000.
The previous week’s figure was revised up to 388,000 from 380,000.
The soft data sparked concerns over the strength of the U.S. economic recovery, ahead of the Federal Reserve’s two-day policy meeting this week.
In New Zealand, official data showed that consumer price inflation 0.5% in the first quarter, after a 0.3% decline the previous quarter, slightly less than expectations for a 0.6% increase.
Market sentiment improved ahead of the weekend after the Group of 20 leading economies agreed Friday to boost the International Monetary Fund’s lending capacity by USD430 billion, to help shield the global economy from the debt crisis roiling the euro zone.
In the week ahead, investors will be eyeing the Fed’s rate statement for any signs that the central bank is leaning towards another round of monetary easing. In addition, the U.S. is to release preliminary data on first quarter gross domestic product.
Meanwhile, the Reserve Bank of New Zealand is to announce its benchmark interest rate.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.
Tuesday, April 24
Markets in New Zealand will remained closed due to a national holiday.
Meanwhile, the U.S. is to produce a report on house price inflation, a key indicator of the housing industry’s health, as well as a Conference Board report on consumer confidence and government data on new home sales.
Wednesday, April 25
The RBNZ is to announce its benchmark interest rate and publish its rate statement.
The U.S. is to publish government data on durable goods orders, a leading indicator of production, and crude oil stockpiles. The Federal Reserve is to announce its benchmark interest rate and release its rate statement. Also Wednesday, U.S. Treasury Secretary Timothy Geithner is scheduled to speak.
Thursday, April 26
The U.S. is to publish government data on initial unemployment claims, an important signal of overall economic health, as well as industry data on pending home sales.
Friday, April 27
The U.S. is to round up the week with preliminary data on first quarter GDP, as well as reports on the GDP price index and employment cost inflation. In addition, the University of Michigan is to release revised data on consumer sentiment.
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