Investing.com - The Australian dollar was lower against its U.S. counterpart on Friday, trimming some of the week’s gains as sustained concerns over the handling of the debt crisis in the euro zone weighed on demand for riskier assets.
AUD/USD hit 1.0385 on January 3, the pair’s highest since November 9; the pair subsequently consolidated at 1.0226 by close of trade on Friday, inching up 0.07% over the week.
The pair is likely to find support at 1.0251, the low of December 26 and resistance at 1.0324, the high of December 2.
Risk sentiment weakened on Friday as concerns over the sovereign funding needs of troubled euro zone states, as well as signs of weakness in the region’s banking sector overshadowed better-than-expected U.S. jobs data, sending the greenback broadly higher.
The U.S. Department of Labor said nonfarm payrolls increased by 200,000 in December from a downwardly revised 100,000 the previous month and surpassing expectations for a 150,000 increase. The unemployment rate unexpectedly fell to 8.5%, the lowest level since February 2009.
The greenback found support earlier in the week after France sold EUR4.02 billion of 10-year bonds in an auction which met with solid demand but at higher yields.
France is seen as vulnerable to losing its triple-A credit rating in the coming weeks, after it was put on negative watch by ratings agencies Standard & Poor’s and Fitch’s in December, amid concerns over the handling of the financial crisis in the euro zone.
The French auction came one day after an auction of German 10-year government debt which encountered lower than average investor demand.
Demand for the U.S. dollar was also boosted as fears over the strength of the euro zone’s banking sector intensified after a report on Thursday showed that overnight deposits at the European Central Bank reached a new record high of EUR455 billion, indicating that European banks remain unwilling to lend to each other.
In Australia, official data showed that the country’s trade balance rose less-than-expected in December, advancing to a seasonally adjusted AUD1.38 billion from AUD1.60B the previous month.
Analysts had expected Australia’s trade balance to rise to AUD1.66B in December.
A separate report showed that an index of services in Australia rose to 49 in December from a reading at 47.7 the previous month.
In the week ahead, investors will be closely watching a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel on Monday for any signs of progress in resolving the region’s two-year old debt crisis.
France, Greece, Germany, Italy and Spain are all scheduled to hold auctions of government debt, while the ECB is to hold its first policy-setting meeting of the New Year.
Also next week, the U.S. is to publish official data on retail sales and consumer sentiment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 9
Australia is to release industry data on new home sales, a leading indicator of economic health, followed by an official report on retail sales, the primary gauge of consumer spending.
Later in the day, Federal Open Market Committee member Dennis Lockhart is to speak.
Tuesday, January 10
Australia is to release data on building approvals, a key indicator of future construction activity.
Elsewhere, U.S. FOMC members John Williams and Sandra Pianalto are to speak.
Wednesday, January 11
The U.S. is to produce official data on crude oil stockpiles, while the Federal Reserve is to release its Beige Book. In addition, FOMC member Dennis Lockhart is to speak.
Thursday, January 12
The U.S. is to release official data on retail sales and initial jobless claims. The country is also to publish government data on business inventories, a signal of future business spending, followed by a report on the federal budget balance.
Friday, January 13
The U.S. is to round up the week with data on the trade balance, as well as government data on import prices. In addition, the University of Michigan is to release preliminary data on inflation expectations and consumer sentiment, a leading indicator of consumer spending.
AUD/USD hit 1.0385 on January 3, the pair’s highest since November 9; the pair subsequently consolidated at 1.0226 by close of trade on Friday, inching up 0.07% over the week.
The pair is likely to find support at 1.0251, the low of December 26 and resistance at 1.0324, the high of December 2.
Risk sentiment weakened on Friday as concerns over the sovereign funding needs of troubled euro zone states, as well as signs of weakness in the region’s banking sector overshadowed better-than-expected U.S. jobs data, sending the greenback broadly higher.
The U.S. Department of Labor said nonfarm payrolls increased by 200,000 in December from a downwardly revised 100,000 the previous month and surpassing expectations for a 150,000 increase. The unemployment rate unexpectedly fell to 8.5%, the lowest level since February 2009.
The greenback found support earlier in the week after France sold EUR4.02 billion of 10-year bonds in an auction which met with solid demand but at higher yields.
France is seen as vulnerable to losing its triple-A credit rating in the coming weeks, after it was put on negative watch by ratings agencies Standard & Poor’s and Fitch’s in December, amid concerns over the handling of the financial crisis in the euro zone.
The French auction came one day after an auction of German 10-year government debt which encountered lower than average investor demand.
Demand for the U.S. dollar was also boosted as fears over the strength of the euro zone’s banking sector intensified after a report on Thursday showed that overnight deposits at the European Central Bank reached a new record high of EUR455 billion, indicating that European banks remain unwilling to lend to each other.
In Australia, official data showed that the country’s trade balance rose less-than-expected in December, advancing to a seasonally adjusted AUD1.38 billion from AUD1.60B the previous month.
Analysts had expected Australia’s trade balance to rise to AUD1.66B in December.
A separate report showed that an index of services in Australia rose to 49 in December from a reading at 47.7 the previous month.
In the week ahead, investors will be closely watching a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel on Monday for any signs of progress in resolving the region’s two-year old debt crisis.
France, Greece, Germany, Italy and Spain are all scheduled to hold auctions of government debt, while the ECB is to hold its first policy-setting meeting of the New Year.
Also next week, the U.S. is to publish official data on retail sales and consumer sentiment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 9
Australia is to release industry data on new home sales, a leading indicator of economic health, followed by an official report on retail sales, the primary gauge of consumer spending.
Later in the day, Federal Open Market Committee member Dennis Lockhart is to speak.
Tuesday, January 10
Australia is to release data on building approvals, a key indicator of future construction activity.
Elsewhere, U.S. FOMC members John Williams and Sandra Pianalto are to speak.
Wednesday, January 11
The U.S. is to produce official data on crude oil stockpiles, while the Federal Reserve is to release its Beige Book. In addition, FOMC member Dennis Lockhart is to speak.
Thursday, January 12
The U.S. is to release official data on retail sales and initial jobless claims. The country is also to publish government data on business inventories, a signal of future business spending, followed by a report on the federal budget balance.
Friday, January 13
The U.S. is to round up the week with data on the trade balance, as well as government data on import prices. In addition, the University of Michigan is to release preliminary data on inflation expectations and consumer sentiment, a leading indicator of consumer spending.