Investing.com - The Australian dollar moved higher against the U.S. dollar Friday, ahead of a scheduled meeting of European leaders to discuss augmentation of the rescue fund for debt-threatened euro-zone members.
AUD/USD hit 1.0263 in early Asian trade, the pair’s highest since Thursday; the pair subsequently consolidated at 1.0234, gaining 0.04%.
The pair was likely to find support at 0.9906, last Thursday’s low, and resistance at 1.0416, the high of September 12.
On Thursday, French President Nicolas Sarkozy and German Chancellor Angela Merkel issued a joint statement from Frankfurt, where the two agreed to meet Saturday in Brussels a day before the scheduled Sunday summit of European leaders.
The French and German leaders announced that a “comprehensive and ambitious” response to the debt crisis would emerge this weekend with a second meeting to take place no later than next Wednesday.
Earlier Thursday, a report from the Federal Reserve Bank of Philadelphia showed that manufacturing activity in the state grew in October to a seasonally adjusted 8.7, from minus 17.5 the month before.
Analysts had expected the index, widely viewed as a harbinger of national trends, to fall by 9.5 last month and the data represented the biggest one month turnaround in 31 years.
Wall Street stocks strayed between gains and losses for most of the day before settling mixed; The Dow Jones Industrial Average gained 0.32%, the Nasdaq Composite Index fell 0.21%, and the S&P 500 advanced 0.46%.
On Thursday, National Australia Bank released its latest business sentiment survey showing that confidence fell to minus 4 points in the third quarter, from plus 5 in the second quarter.
“Conditions remained strongest in mining, followed by recreation and personal services and transport and utilities, while conditions were weakest in manufacturing, retail and construction,” NAB said in the survey.
Earlier Thursday, Australian Treasury Secretary Martin Parkinson warned that failure at this weekend’s European finance summit would have dire consequences for Australia.
“The bigger risk to the Australian economy would be if Europe failed to deliver a comprehensive response to the sovereign debt crisis and found itself in a situation where it was dragging the rest of the world into a second global recession,” Parkinson said in Canberra.
In Sydney, Australian shares moved higher in early Friday trade, with the benchmark S&P/ASX 200 gaining 0.2% to 4,151.50.
Meanwhile, the Australian dollar was higher against both the euro and the Japanese yen, with EUR/AUD falling 0.08% to hit 1.3458, and AUD/JPY up 0.10% to hit 78.64.