Investing.com - The Australian dollar rallied to an almost five-week high against its U.S. counterpart on Friday, after disappointing data on U.S. first quarter growth added to expectations that the Federal Reserve may implement fresh easing measures.
AUD/USD hit 1.0246 on Tuesday, the pair’s lowest since April 11; the pair subsequently consolidated at 1.0467 by close of trade on Friday, gaining 0.80% over the week.
The pair is likely to find support at 1.0305, Wednesday’s low and resistance at 1.0557, the high of March 27.
The Commerce Department said gross domestic product in the U.S. expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase.
Earlier in the week, Fed Chairman Ben Bernanke left open the possibility of further measures to bolster economic growth after the central bank’s monetary policy meeting, saying policymakers were “prepared to do more” if necessary.
The Australian dollar also found support after new easing measures announced by the Bank of Japan fell short of some market expectations.
Following its monetary policy meeting on Thursday, the BoJ said it will increase the size of its asset purchase fund by JPY5 trillion, while a program to provide loans to banks was cut back by JPY5 trillion.
Economists had expected an increase of as much JPY10 trillion to the nation’s stimulus program.
The Aussie came under pressure earlier in the week, as weak domestic inflation data added to expectations that the Reserve Bank of Australia will cut interest rates at its meeting this week.
On Tuesday, official data showed that consumer prices rose just 0.1% in the first quarter, below expectations for a 0.7% rise, bringing the annualized rate of inflation to 2.2%, at the lower end of the RBA’s 2% to 3% targeted range.
In the week ahead, Friday’s data on U.S. non-farm payrolls will be eagerly anticipated amid concerns that the economic recovery in the U.S. is losing momentum, while the RBA’s rate decision will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 30
Australia is to produce industry data on new home sales, a leading indicator of economic health, as well as a report by the RBA on private sector credit.
The U.S. is to publish official data on core personal consumption expenditures price inflation and on personal spending, followed by a report on business activity in Chicago.
Tuesday, May 1
In Australia, the RBA is to announce its benchmark interest rate, and release its rate statement. The country is also to publish official data on house price inflation, a key indicator of the housing industry’s health.
In the U.S., the Institute for Supply Management is to release a closely watched report on manufacturing activity.
Wednesday, May 2
The U.S. is to produce a report on non-farm employment change, a leading indicator of economic health, followed by government data on factory orders and crude oil stockpiles.
Thursday, May 3
Australia is to publish data on service sector growth, a leading indicator of economic health.
Later Thursday, the U.S. is to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs, an important signal of consumer inflation. The country is also to publish an ISM report on service sector growth.
Friday, May 4
The RBA is to release its monetary policy statement, which provides valuable insights into the bank's view of economic conditions and inflation.
The U.S. is to round up the week by publishing its closely watched government data on non-farm employment change and the unemployment rate, as well as a report on average hourly earnings.
AUD/USD hit 1.0246 on Tuesday, the pair’s lowest since April 11; the pair subsequently consolidated at 1.0467 by close of trade on Friday, gaining 0.80% over the week.
The pair is likely to find support at 1.0305, Wednesday’s low and resistance at 1.0557, the high of March 27.
The Commerce Department said gross domestic product in the U.S. expanded at a rate of 2.2% in the three months to March, below expectations for a 2.5% increase.
Earlier in the week, Fed Chairman Ben Bernanke left open the possibility of further measures to bolster economic growth after the central bank’s monetary policy meeting, saying policymakers were “prepared to do more” if necessary.
The Australian dollar also found support after new easing measures announced by the Bank of Japan fell short of some market expectations.
Following its monetary policy meeting on Thursday, the BoJ said it will increase the size of its asset purchase fund by JPY5 trillion, while a program to provide loans to banks was cut back by JPY5 trillion.
Economists had expected an increase of as much JPY10 trillion to the nation’s stimulus program.
The Aussie came under pressure earlier in the week, as weak domestic inflation data added to expectations that the Reserve Bank of Australia will cut interest rates at its meeting this week.
On Tuesday, official data showed that consumer prices rose just 0.1% in the first quarter, below expectations for a 0.7% rise, bringing the annualized rate of inflation to 2.2%, at the lower end of the RBA’s 2% to 3% targeted range.
In the week ahead, Friday’s data on U.S. non-farm payrolls will be eagerly anticipated amid concerns that the economic recovery in the U.S. is losing momentum, while the RBA’s rate decision will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 30
Australia is to produce industry data on new home sales, a leading indicator of economic health, as well as a report by the RBA on private sector credit.
The U.S. is to publish official data on core personal consumption expenditures price inflation and on personal spending, followed by a report on business activity in Chicago.
Tuesday, May 1
In Australia, the RBA is to announce its benchmark interest rate, and release its rate statement. The country is also to publish official data on house price inflation, a key indicator of the housing industry’s health.
In the U.S., the Institute for Supply Management is to release a closely watched report on manufacturing activity.
Wednesday, May 2
The U.S. is to produce a report on non-farm employment change, a leading indicator of economic health, followed by government data on factory orders and crude oil stockpiles.
Thursday, May 3
Australia is to publish data on service sector growth, a leading indicator of economic health.
Later Thursday, the U.S. is to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs, an important signal of consumer inflation. The country is also to publish an ISM report on service sector growth.
Friday, May 4
The RBA is to release its monetary policy statement, which provides valuable insights into the bank's view of economic conditions and inflation.
The U.S. is to round up the week by publishing its closely watched government data on non-farm employment change and the unemployment rate, as well as a report on average hourly earnings.