Investing.com - The Australian dollar tumbled to its lowest level since November against its U.S. counterpart on Friday, as demand for growth linked assets was hit by ongoing concerns over the debt crisis in the euro zone.
AUD/USD hit 0.9749 on Friday, the pair’s lowest since November 28; the pair subsequently consolidated at 0.9842 by close of trade, falling 1.68% over the week.
The pair is likely to find support at 0.9749, Friday’s low and resistance at 0.9897, Friday’s high.
Demand for the safety of the greenback remained supported as fears over the possibility of a Greek exit from the euro zone dominated market sentiment, after cross party talks aimed at forming a coalition government failed, forcing another round of elections.
Market sentiment found some support on Friday after an opinion poll in Greece indicated that pro-bailout party, New Democracy was leading the polls ahead of the fresh elections, due to be held on June 17.
Meanwhile, concerns over the health of Spain’s banking system and the prospect of more state bailouts for lenders saw the country’s borrowing costs climb above 6% last week. On Thursday, ratings agency Moody's cut the credit ratings of 16 Spanish banks.
On Tuesday, the minutes of the Reserve Bank of Australia’s May 1 meeting showed that the bank cut the benchmark interest rate to a two-year low of 3.75% to spur growth and bolster consumer confidence.
The minutes said “the risks emanating from Europe continue to cloud the global outlook;” and added that “inflation is likely to remain in the lower half of the target range over the foreseeable future.”
In the U.S., the minutes of the Federal Reserve’s May meeting indicated that several policymakers remained open to further efforts to stimulate the U.S. economy if growth falters or if the risks to the economy became great enough.
Data on Thursday showing that manufacturing activity in the Philadelphia-region contracted for the first time in eight months in May added to concerns over the pace of the U.S. economic recovery.
The Federal Reserve Bank of Philadelphia said that it’s manufacturing index dropped by 14.3 points to minus 5.8 in May from the previous months reading of 8.5.
Analysts had expected the index to rise by 1.5 points to 10.0 in May.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. in the week before last held steady at a seasonally adjusted 370,000, confounding expectations for a decline of 5,000 to 365,000.
In the week ahead, investors will be looking ahead to Thursday’s U.S. data on manufacturing orders, as they attempt to gauge the strength of the U.S. recovery, while developments in the euro zone are also likely to remain 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, as there are no relevant events on this day.
Tuesday, May 22
The U.S. is to release industry data on existing home sales, a leading indicator of economic health.
Wednesday, May 23
Australia is to release separate reports by the Melbourne Institute and the Conference Board on leading economic indicators, which are designed to predict the future direction of the economy.
The U.S. is to produce government data on new home sales, a leading indicator of economic health, as well as data on crude oil stockpiles.
Thursday, May 24
The U.S. is to release official data on core durable goods orders and a separate report on initial jobless claims, both leading indicators of economic health.
Friday, May 25
The U.S. is to round up the week with revised data from the University of Michigan on on consumer sentiment and inflation expectations.
AUD/USD hit 0.9749 on Friday, the pair’s lowest since November 28; the pair subsequently consolidated at 0.9842 by close of trade, falling 1.68% over the week.
The pair is likely to find support at 0.9749, Friday’s low and resistance at 0.9897, Friday’s high.
Demand for the safety of the greenback remained supported as fears over the possibility of a Greek exit from the euro zone dominated market sentiment, after cross party talks aimed at forming a coalition government failed, forcing another round of elections.
Market sentiment found some support on Friday after an opinion poll in Greece indicated that pro-bailout party, New Democracy was leading the polls ahead of the fresh elections, due to be held on June 17.
Meanwhile, concerns over the health of Spain’s banking system and the prospect of more state bailouts for lenders saw the country’s borrowing costs climb above 6% last week. On Thursday, ratings agency Moody's cut the credit ratings of 16 Spanish banks.
On Tuesday, the minutes of the Reserve Bank of Australia’s May 1 meeting showed that the bank cut the benchmark interest rate to a two-year low of 3.75% to spur growth and bolster consumer confidence.
The minutes said “the risks emanating from Europe continue to cloud the global outlook;” and added that “inflation is likely to remain in the lower half of the target range over the foreseeable future.”
In the U.S., the minutes of the Federal Reserve’s May meeting indicated that several policymakers remained open to further efforts to stimulate the U.S. economy if growth falters or if the risks to the economy became great enough.
Data on Thursday showing that manufacturing activity in the Philadelphia-region contracted for the first time in eight months in May added to concerns over the pace of the U.S. economic recovery.
The Federal Reserve Bank of Philadelphia said that it’s manufacturing index dropped by 14.3 points to minus 5.8 in May from the previous months reading of 8.5.
Analysts had expected the index to rise by 1.5 points to 10.0 in May.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. in the week before last held steady at a seasonally adjusted 370,000, confounding expectations for a decline of 5,000 to 365,000.
In the week ahead, investors will be looking ahead to Thursday’s U.S. data on manufacturing orders, as they attempt to gauge the strength of the U.S. recovery, while developments in the euro zone are also likely to remain 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, as there are no relevant events on this day.
Tuesday, May 22
The U.S. is to release industry data on existing home sales, a leading indicator of economic health.
Wednesday, May 23
Australia is to release separate reports by the Melbourne Institute and the Conference Board on leading economic indicators, which are designed to predict the future direction of the economy.
The U.S. is to produce government data on new home sales, a leading indicator of economic health, as well as data on crude oil stockpiles.
Thursday, May 24
The U.S. is to release official data on core durable goods orders and a separate report on initial jobless claims, both leading indicators of economic health.
Friday, May 25
The U.S. is to round up the week with revised data from the University of Michigan on on consumer sentiment and inflation expectations.