Forex - AUD/USD weekly outlook: June 8 - 12

Investing.com - The Australian dollar declined against its U.S. counterpart on Friday to end close to a seven-week low as upbeat U.S. employment data reinforced expectations that the Federal Reserve was on track to raise interest rates later this year.

AUD/USD hit 0.7597 on Monday, a level not seen since April 15, before subsequently consolidating at 0.7622 by close of trade on Friday, down 0.81% for the day and 0.14% lower for the week.

The Labor Department reported that the U.S. economy added 280,000 jobs in May, the most since December and far more than the 225,000 forecast by economists.

The unemployment rate ticked up to 5.5% last month from 5.4% in April, while average hourly earnings rose by 0.3%, above expectations for a 0.2% increase.

The robust jobs report added to the view that the U.S. economy was regaining strength after contracting in the first quarter, fuelling speculation that the Federal Reserve could raise rates as early as September.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, jumped 0.93% to 96.38 late Friday.

Meanwhile, in Australia, data released on Thursday showed that retail sales were flat in April, disappointing expectations for a 0.4% rise. A separate report showed that Australia's trade deficit widened to A$3.88 billion in April from A$1.23 billion in March.

On Wednesday, the Australian Bureau of Statistics said the economy expanded 0.9% in the first quarter, beating expectations for a growth rate of 0.7%. Year-on-year, Australia's GDP rose 2.3% in the three months to March, compared to expectations for an increase of 2.1%.

On Tuesday, the Reserve Bank of Australia left interest rates on hold at a record-low 2.00% but signaled the possibility for further cuts later in the year.

In the week ahead, investors will be focusing on Thursday's U.S. retail sales report for May, as well as Friday's consumer sentiment data, for fresh indications on the strength of the economy and the timing of a rate increase.

Market players will also be looking ahead to the release of Australian employment data on Thursday.

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, June 9

Australia is to release official data on home loans and a private sector report on business confidence.

China is to release data on consumer and producer price inflation. The Asian nation is Australia's largest trade partner.

Wednesday, June 10

Australia is to publish private sector data on consumer sentiment, while Reserve Bank of Australia Governor Glenn Stevens is to speak at a public event; his comments will be closely watched.

Thursday, June 11

Australia is to publish its monthly employment report.

China is to publish data on industrial production and fixed asset investment.

The U.S. is to release reports on initial jobless claims and retail sales.

Friday, June 12

The U.S. is to round up the week with data on producer price inflation and consumer sentiment.