Forexpros – The New Zealand dollar ended the week lower against its U.S. counterpart on Friday, as investor confidence was hit after disappointing U.S. employment data and amid sustained concerns over the debt crisis in the euro zone.
NZD/USD hit 0.7499 on Friday, the pair’s lowest since May 24; the pair subsequently consolidated at 0.7516 by close of trade on Friday, shedding 0.21% over the week.
The pair was likely to find support at 0.7480, the low of May 24 and resistance at 0.7583, the high of May 25.
Market sentiment came under pressure after the Department of Labor said on Friday that the U.S. economy added just 69,000 jobs in May, far below expectations for a gain of 150,000, while the unemployment rate ticked up to 8.2% from 8.1%.
A separate report showed that manufacturing activity in the U.S. slowed in May. The Institute for Supply Management’s manufacturing index fell to 53.5 from 54.8 in April, against expectations for a decline to 53.9.
The weak data added to concerns that the economic recovery in the U.S. is losing momentum, which could lead to a third round of quantitative easing from the U.S. Federal Reserve.
Meanwhile, data on Friday showing that unemployment in the euro zone rose to a record high of 11% in April added to concerns over the worsening of the euro zone’s debt crisis, after the yield on Spanish 10-year bonds climbed to a euro-era high of 6.7% on Wednesday.
The lack of a convincing plan to recapitalize stricken lender Bankia fuelled fears that Madrid will be forced to seek an international bailout.
Earlier in the week, the National Bank of New Zealand said its index of business confidence fell to 27.1 in May from a reading of 35.8 the previous month.
The data came after a report showed that building consents in New Zealand tumbled 7.2% in April after a 19.6% increase the previous month.
In the week ahead, market participants will be watching Thursday’s testimony on the economic outlook by Fed Chairman Ben Bernanke for any indications that the central bank is considering more monetary easing.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, June 4
Markets in New Zealand are to remain closed for a public holiday.
The U.S. is to produce official data on factory orders, a leading indicator of production.
Tuesday, June 5
In the U.S., the Institute for Supply Management is to release a report on non-manufacturing activity, a key indicator of economic health.
Wednesday, June 6
The U.S. is to release revised data on nonfarm productivity, followed by government data on crude oil stockpiles, while the Federal Reserve is to release its Beige Book.
Thursday, June 7
The U.S. is to release government data on initial unemployment claims, while Fed Chairman Ben Bernanke is to appear before the Joint Economic Committee, in Washington.
Friday, June 8
The U.S. is to round up the week with government data on its trade balance.
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