Forex - NZD/USD weekly outlook: June 13-17

Investing.com – Last week saw the New Zealand dollar ease off a record high against its U.S. counterpart on Friday, but the kiwi was expected to remain well supported as expectations grew that the Reserve Bank of New Zealand would raise interest rates.

NZD/USD hit an all-time high of 0.8300 on Thursday; the pair subsequently consolidated at 0.8212 by close of trade on Friday, gaining 0.75% over the week.

The pair was likely to find support at 0.8142, Thursday’s low and resistance at 0.8300, the pair’s record high.

On Thursday, the Reserve Bank of New Zealand left its official cash rate unchanged at 2.50% but indicated that rates will need to rise over the next two years to curb inflation.

“As gross domestic product growth picks up, underlying inflation is expected to rise,” RBNZ Governor Alan Bollard said following the central bank's monthly policy meeting. “A gradual increase in the official cash rate over the next two years will be required to offset this.”

Governor Bollard also said he expected the New Zealand dollar would gradually decline from its current record level.

Mounting fears over global economic growth saw investors shun riskier assets on Friday after data on Friday showed that China reported a trade surplus of USD13.1 billion in May, significantly below expectations for a surplus of USD19.1 billion, as export growth slowed.

China is New Zealand’s second largest trading partner.

Looking ahead to the coming week, U.S. data on retail sales and consumer price inflation will be a focus of attention. Meanwhile, New Zealand is to produce quarterly data on retail sales. 

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 13

In the U.S., Federal Reserve Bank of Dallas President Richard Fisher is to speak at a public engagement.

Meanwhile, New Zealand is to release a report on food price inflation.

Tuesday, June 14

The U.S. is to produce official data on producer price inflation, a leading indicator of consumer inflation. The country is also due to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Later in the day, New Zealand is also to publish data on retail sales.

Wednesday, June 15

The U.S. is to release a flurry of data, including reports on consumer price inflation, industrial production and the capacity utilization rate, leading indicators of economic health.

The U.S. is also to publish government data on the balance of domestic and foreign investment as well as official data on crude oil inventories and manufacturing activity in New York state.

Meanwhile, New Zealand is to publish a report on consumer sentiment as well as data on manufacturing conditions.

Thursday, June 16

The U.S. is to publish its weekly report on initial jobless claims as well as official data on building permits and housing starts, an excellent gauge of future construction activity. The country is also to produce data on its current account and natural gas stockpiles, while the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity.

Friday, June 17

The U.S. is to round up the week with a report on an index of leading indicators, which is designed to predict the direction of the economy, while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.