The New Zealand dollar ended Friday’s session close to a four-week low against its U.S. counterpart, amid speculation that the Federal Reserve could hike U.S. interest rates sooner than expected.
NZD/USD hit 0.8648 on Thursday, the pair’s lowest since June 17, before subsequently consolidating at 0.8688 by close of trade on Friday, up 0.24% for the day but 1.45% lower for the week.
The pair is likely to find support at 0.8648, the low from July 17 and resistance at 0.8717, the high from July 17.
Demand for the U.S. dollar continued to be underpinned after Federal Reserve Chair Janet Yellen indicated earlier in the week that interest rates may rise sooner if the economy continues to improve.
Meanwhile, investors reassessed the geopolitical situation in Eastern Europe and in the Middle East.
A Malaysian Airlines passenger jet crashed in eastern Ukraine on Thursday. All 298 people on board were killed, with the U.S. blaming pro-Russian separatists for the act.
Moscow has denied involvement in the crash, which came a day after the U.S. announced a fresh round of sanctions against Russia for supporting separatists in east Ukraine.
Markets were also unsettled as Israel expanded its ground offensive in Gaza against Hamas militants who fired hundreds of rockets into Israel.
Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the New Zealand dollar in the week ending July 15.
Net longs totaled 15,453 contracts, compared to net longs of 14,416 in the preceding week.
In the week ahead, the U.S. is to release what will be closely watched data on consumer prices, home sales and manufacturing orders, while a rate statement by New Zealand’s central bank will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Wednesday as there are no relevant events on these days.
Tuesday, July 22
The U.S. is to release reports on consumer price inflation and existing home sales.
Thursday, July 24
The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The central bank is also to hold a press conference to discuss the monetary policy decision.
New Zealand is also due to release a report on its trade balance.
The U.S. is to produce data on unemployment claims, manufacturing activity and new home sales.
Friday, July 25
New Zealand is to release private sector data on business confidence.
The U.S. is to round up the week with data on durable goods orders.