Topic: COZfx: NZD/USD weekly outlook
COZforex: The New Zealand dollar declined from a 5 weeks high against its US counterpart on Friday, as escalating tensions in Iraq boosted demand for safe-haven assets.
NZD/USD hit 0.8699 on Thursday; the pair’s highest since May 7, before subsequently consolidating at 0.8665 by close of trade on Friday, down 0.26% for the day but 1.9% higher for the week. COZforex senior currency strategist Ian • Quigley said, NZD/USD is likely to find support at 0.8604, the low from June 12 and resistance at 0.8699, the high from June 12.
Concerns over the ongoing Sunni insurgency in Iraq hit market sentiment on Friday, after insurgents took control of the Iraqi cities Mosul and Tikrit, fuelling fears over the impact of reduced oil supply on global growth. The escalating violence in Iraq overshadowed a report showing that US consumer sentiment unexpectedly deteriorated in June.
The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.
The kiwi rallied more than 1% against the greenback on Thursday after the Reserve Bank of New Zealand raised its benchmark interest rate to a five-year high of 3.25% from 3.00% and suggested that borrowing costs could rise again this year.
Commenting on the decision, RBNZ Governor Graeme Wheeler said "it is important that inflation expectations remain contained and that interest rates return to a more neutral level."
Data from the Commodities Futures Trading Commission released Friday showed that speculators modestly decreased their bullish bets on the New Zealand dollar in the week ending June 10.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting, while first quarter growth data out of New Zealand will also be closely watched.
(COZ forex UK)