Forex - AUD/USD weekly outlook: December 8 - 12

Investing.com - The Australian dollar ended Friday's session at the lowest level in more than four years against its U.S. counterpart, after data showed that the U.S. economy added much more jobs than expected last month, underlining the view that the Federal Reserve will move closer to raising interest rates.

AUD/USD fell to 0.8309 on Friday, the pair's lowest since June 2010, before subsequently consolidating at 0.8311 by close of trade on Friday, down 0.87% for the day and 2.25% lower for the week.

The pair is likely to find support at 0.8261, the low from June 10, 2010, and resistance at 0.8428, the high from December 4.

The U.S. dollar rallied after the Department of Labor said that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.

October’s figure was revised up to 243,000 from a previously reported 214,000, while the unemployment rate remained unchanged at a six-year low of 5.8%.

The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.

The US dollar index, which measures the greenback against a basket of six major currencies, hit a peak of 89.50, the strongest level since March 2009 and ended the day up 0.82% to 89.39.

Meanwhile, in Australia, the Reserve Bank of Australia left interest rates unchanged at a record-low 2.5% on Tuesday and reiterated its intention to keep borrowing costs at record low levels for an extended period of time.

On Wednesday, data showed that Australia's economy expanded 0.3% in the third quarter, below expectations for a gain of 0.7%. Year-on-year, gross domestic product rose 2.7%, compared to expectations for an expansion of 3.1%.

Reports on Thursday showed that retail sales rose 0.4% in October, more than the expected 0.1% gain, while the country's trade deficit narrowed to A$1.132 billion in October from A$2.23 billion in September.

In the week ahead investors will be awaiting Thursday's U.S. data on retail sales and jobless claims and Friday’s report on consumer sentiment for further indications on the strength of the economic recovery.

China is to produce what will be closely watched reports on trade, consumer prices and industrial production in the week ahead. The Asian nation is Australia's largest trade partner.

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

Monday, December 8

China is to publish data on the trade balance, the difference in value between imports and exports.

Tuesday, December 9

Australia is to publish private sector data on business confidence.

Wednesday, December 10

Australia is to produce private sector data on consumer sentiment, as well as official data on home loans.

China is to publish data on the consumer price index.

Thursday, December 11

Australia is to publish data on the change in the number of people employed and the unemployment rate.

The U.S. is to release data on retail sales, the government measure of consumer spending, as well as the weekly report on jobless claims.

Friday, December 12

China is to release data on industrial production and fixed asset investment.

The U.S. is to round up the week with data on producer prices and a preliminary report on consumer sentiment.