Forexpros – The New Zealand dollar rose to a three-day high against its U.S. counterpart on Friday, trimming some of the week’s losses as new signs of progress in resolving the euro zone’s debt crisis boosted demand for riskier assets.
NZD/USD hit 0.7460 on Thursday, the pair’s lowest since November 25; the pair subsequently consolidated at 0.7615 by close of trade on Friday, declining 1.68% over the week.
The pair is likely to find support at 0.7447, the low of November 21 and resistance at 0.7722, the high of November 16.
Risk appetite strengthened as European Union leaders unveiled a new agreement to tighten fiscal rules in the euro zone, in order to strengthen economic integration and tackle the region’s financial crisis. The plan is to be discussed by member states at a meeting on Tuesday.
Also Friday, the head of the euro zone’s bailout fund, the European Financial Stability Facility, announced that around EUR600 billion are available to fight the region’s debt crisis, a greater amount than Italy and Spain’s combined funding needs for 2012, and more will be provided in March if needed.
Earlier in the day, official data showed that core consumer price inflation in the U.S. rose more-than-expected in November, ticking up 0. 2% after a 0.1% increase the previous month.
The report also showed that CPI was flat after a 0.1% decline in October. Analysts had expected CPI in the U.S. to rise 0.1% in November.
The kiwi found support on Thursday after the U.S. Department of Labor said that the number of individuals filing for initial jobless benefits last week fell to a three-year low of 366,000.
Data also showed that the New York Federal Reserve’s index of manufacturing conditions jumped to a seven-month high in December, while the Philadelphia Federal Reserve’s index of manufacturing conditions doubled expectations with a reading at 10.3.
Earlier in the week, the Fed warned that market turbulence stemming from the crisis in the euro zone posed a threat to the U.S. economy but stopped short of indicating further stimulus measures, sending the greenback broadly higher.
In the week ahead investors will be keeping a close watch on Tuesday’s report on German business climate, to assess the impact of the debt crisis on the region’s largest economy.
Meanwhile, the U.S. is to release key reports on the housing sector, durable goods and jobless claims, while New Zealand is to publish data on business confidence and third quarter gross domestic product.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, December 19
New Zealand is to release data on business confidence as well as a report on consumer sentiment, an important indicator of economic health.
Tuesday, December 20
New Zealand is to release government data on the current account and visitor arrivals.
Later Tuesday, the U.S. is to publish official data on building permits, an excellent gauge of future construction activity, as well as a report on housing starts.
Wednesday, December 21
New Zealand is to publish government data on third quarter gross domestic product, the broadest measure of economic growth and the foremost indicator of the economy’s health.
Also Wednesday, the U.S. is to produce industry data on existing home sales, a leading indicator of economic health, as well as data on crude oil stockpiles and the treasury currency report.
Thursday, December 22
The U.S. is to publish its weekly report on initial jobless claims, a leading indicator of economic health. The country is also to produce revised data on third quarter GDP, while the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Friday, December 23
The U.S. is to round up the week with official data on durable goods orders, a leading indicator of production as well as data on personal spending income, personal spending and new home sales.
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