Investing.com - The Australian dollar ended the week moderately higher against its U.S. counterpart on Friday, but remained under pressure as risk sentiment weakened amid fresh concerns over a global economic slowdown.
AUD/USD hit 1.0612 on Thursday, the pair’s highest since March 20; the pair subsequently consolidated at 1.0574 by close of trade on Friday, easing up 0.03% over the week.
The pair is likely to find support at 1.0487, the low of July 31 and resistance at 1.0690, the high of March 6.
The Aussie fell to a one-week low against the greenback on Friday, after data showed that Chinese exports grew just 1.0% on the year in July, down from the 11.3% gain seen in June, while imports rose 4.7% year-over-year, down from 6.3% in June.
The data came after the Reserve Bank of Australia raised its 2012 growth forecast on stronger-than-expected household demand, while saying the sustained currency strength could prove more of a drag on the economy than in the past.
Sentiment also remained under pressure after the European Central Bank said in its monthly bulletin on Thursday that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.
The ECB revised down its forecast for economic growth to 0.6% in 2013, down from 1% previously and forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast of for a 0.2% contraction.
In addition, optimism that the ECB will soon move to cut high Spanish and Italian borrowing costs faded as investors waited for more details of the bank’s proposed bond buying program to emerge.
Meanwhile, the greenback found support after robust employment and trade data eased concerns over the U.S. economic outlook.
The Department of Labor said that the number of people who filed for unemployment assistance in the U.S. declined to 361,000 last week, from an upwardly revised 367,000 in the previous week, against expectations for an increase to 370,000.
A separate report showed that the U.S. trade deficit dropped to USD42.9 billion in June, its lowest level in two-and-a-half years.
Also Thursday, official data showed that Australia’s economy added 14,000 jobs in July, beating expectations for a 10,200 rise and following a 28,300 decline the previous month.
Australia’s unemployment rate fell unexpectedly to 5.2% in July from 5.3% the previous month.
In the week ahead, market participants will be awaiting data on second quarter growth from the euro zone and looking ahead to central bank minutes from the Bank of Japan and the Bank of England, amid ongoing speculation that world central banks may take steps to shore up economic growth.
Investors will also watching U.S. data on retail sales, inflation and housing in an attempt to assess the strength of the U.S. economic recovery.
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 that day.
Tuesday, August 14
Australia is to produce a report on business confidence, followed by official data on new motor vehicle sales.
Later Tuesday, the U.S. is to publish official data on retail sales and producer price inflation, followed by data on business inventories.
Wednesday, August 15
Australia is to release official data on wage price inflation, as well as a report on consumer sentiment, a leading indicator of consumer spending.
The U.S. is to release official data on consumer price inflation, as well as a report on manufacturing activity in the New York area and government data on net long term securities transactions. The Federal Reserve is also to produce data on the capacity utilization rate and industrial production, followed by a government report on crude oil inventories.
Thursday, August 16
Australia is to publish a report on inflation expectations, which can indicate the future path of consumer inflation.
Later in the day, the U.S. is to publish official data on building permits, a key gauge of future construction activity, as well as weekly government data on unemployment claims. The country is also to release official data on housing starts and a report on manufacturing activity in the Philadelphia area.
Friday, August 17
The U.S. is to round up the week with a preliminary report by the University of Michigan on consumer sentiment and inflation expectations.
AUD/USD hit 1.0612 on Thursday, the pair’s highest since March 20; the pair subsequently consolidated at 1.0574 by close of trade on Friday, easing up 0.03% over the week.
The pair is likely to find support at 1.0487, the low of July 31 and resistance at 1.0690, the high of March 6.
The Aussie fell to a one-week low against the greenback on Friday, after data showed that Chinese exports grew just 1.0% on the year in July, down from the 11.3% gain seen in June, while imports rose 4.7% year-over-year, down from 6.3% in June.
The data came after the Reserve Bank of Australia raised its 2012 growth forecast on stronger-than-expected household demand, while saying the sustained currency strength could prove more of a drag on the economy than in the past.
Sentiment also remained under pressure after the European Central Bank said in its monthly bulletin on Thursday that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.
The ECB revised down its forecast for economic growth to 0.6% in 2013, down from 1% previously and forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast of for a 0.2% contraction.
In addition, optimism that the ECB will soon move to cut high Spanish and Italian borrowing costs faded as investors waited for more details of the bank’s proposed bond buying program to emerge.
Meanwhile, the greenback found support after robust employment and trade data eased concerns over the U.S. economic outlook.
The Department of Labor said that the number of people who filed for unemployment assistance in the U.S. declined to 361,000 last week, from an upwardly revised 367,000 in the previous week, against expectations for an increase to 370,000.
A separate report showed that the U.S. trade deficit dropped to USD42.9 billion in June, its lowest level in two-and-a-half years.
Also Thursday, official data showed that Australia’s economy added 14,000 jobs in July, beating expectations for a 10,200 rise and following a 28,300 decline the previous month.
Australia’s unemployment rate fell unexpectedly to 5.2% in July from 5.3% the previous month.
In the week ahead, market participants will be awaiting data on second quarter growth from the euro zone and looking ahead to central bank minutes from the Bank of Japan and the Bank of England, amid ongoing speculation that world central banks may take steps to shore up economic growth.
Investors will also watching U.S. data on retail sales, inflation and housing in an attempt to assess the strength of the U.S. economic recovery.
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 that day.
Tuesday, August 14
Australia is to produce a report on business confidence, followed by official data on new motor vehicle sales.
Later Tuesday, the U.S. is to publish official data on retail sales and producer price inflation, followed by data on business inventories.
Wednesday, August 15
Australia is to release official data on wage price inflation, as well as a report on consumer sentiment, a leading indicator of consumer spending.
The U.S. is to release official data on consumer price inflation, as well as a report on manufacturing activity in the New York area and government data on net long term securities transactions. The Federal Reserve is also to produce data on the capacity utilization rate and industrial production, followed by a government report on crude oil inventories.
Thursday, August 16
Australia is to publish a report on inflation expectations, which can indicate the future path of consumer inflation.
Later in the day, the U.S. is to publish official data on building permits, a key gauge of future construction activity, as well as weekly government data on unemployment claims. The country is also to release official data on housing starts and a report on manufacturing activity in the Philadelphia area.
Friday, August 17
The U.S. is to round up the week with a preliminary report by the University of Michigan on consumer sentiment and inflation expectations.