By Kymberly Martin
NZ Dollar
The NZD/USD ended the week at little higher at 0.7910, although slightly below intra-night highs.
The NZD/USD traded a pretty quiet path on Friday in the absence of local data releases. It experienced some volatility in the early hours of Saturday morning, at the hands of the USD. At one point it made a lurch toward the 0.7940 level, before returning to end the night around 0.7910.
On the crosses, the NZD/JPY and NZD/GBP made further gains on Friday night. The NZD/JPY ended the week a smidge below 92.00, its highest level since August 2007.
Meanwhile the NZD/GBP was also on the ascendancy on Friday night. It briefly traded above 0.5060 before ending the week just below the 200-day moving average (0.5051).
This week will kick off domestically with the release of the October Performance of Services Index, closely followed by Q3 retail sales figures. Both are likely to confirm the NZ services sector remains in pretty good shape. NZD/USD resistance remains around 0.7980, while support is eyed at 0.7840.
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Majors
The USD closed a little lower on Friday night, but the prize for weakest performance was reserved for the JPY.
On Friday night, equity markets were fairly flat on both sides of the Atlantic, as our global risk appetite index (scale 0-100%) remains at a fairly healthy 66%. However, there were some notable moves in commodities as the WTI oil and gold prices both rebounded by around 2.2%.
The USD index pushed higher (above 88.20) in the early hours of Saturday morning after the release of October US retail sales data (0.3%m/m vs. 0.2% expected). However, the USD index was unable to hold onto the gain and later stepped down to end the week at 87.50.
Eurozone data on Friday night confirmed October inflation at a subdued 0.7%, while the advance reading of Q3 GDP came in at 0.8%y/y (0.7% expected). But these were not enough to inspire much volatility in the EUR. However, the EUR gained the upper hand early on Saturday morning as the USD broadly weakened. The EUR/USD ended the week above 1.2520.
Meanwhile, the USD/JPY touched intra-night highs above 116.80, before drifting off to close at 116.30. CFTC/IMM data for last week showed speculative short positions in JPY have extended to 82.6k from 71.7k. However these are far from extreme levels, suggesting the short JPY trade may still have legs. The GBP/USD was also an underperformer, ending the week at 1.5670, around levels traded last September.
This week kicks off with the preliminary reading of Japan’s Q3 GDP today. This evening the Nov US Empire Manufacturing index will be released along with October US industrial production. US Federal Reserve member Evans is also scheduled to speak.
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