Investing.com - The Australian dollar ended the week sharply lower against its U.S. counterpart, as upbeat U.S. unemployment data diminished expectations for a new round of stimulus measures by the Federal Reserve.
AUD/USD hit 1.0508 on Wednesday, the pair’s lowest since January 25; the pair subsequently consolidated at 1.0574 by close of trade on Friday, tumbling 1.51% over the week.
The pair is likely to find support at 1.0508, Wednesday’s low and resistance at 1.0690, the high of March 6.
The Department of Labor said the U.S. economy added 227,000 jobs in February after increasing by a revised 284,000 the previous month. The unemployment rate held steady at a three year low of 8.3%.
The strong data boosted the dollar as it diminished expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.
A separate report showed that the country’s trade deficit widened unexpectedly in January, falling to USD52.6 billion from a deficit of USD50.4 billion the previous month.
Analysts had expected the trade deficit to narrow to USD48.9 billion in January.
Meanwhile, in Australia, official data showed that the country’s trade balance swung unexpectedly into a deficit of AUD0.67 billion in January, from a surplus of AUD1.33 billion the previous month.
Analysts had expected Australia’s trade surplus to widen to AUD1.52 billion in January.
Earlier Friday, Greece announced that more than 85% of its private creditors had signed up to a debt swap deal, aimed at restructuring 53.5% of the country’s debt. The deal cleared the way for Athens to secure a second bailout worth EUR130 billion and avert a default.
But sentiment was hit after the International Swaps and Derivatives Association said the debt swap constituted a “credit event” that would activate credit-default swaps, which designed to protect investors against losses on Greek sovereign debt.
The risk-related Aussie was also weighed by concerns over the economic outlook for the region after the European Central Bank revised down its forecast for growth in 2012 to a range of between minus 0.5% and 0.3% following Thursday’s policy meeting.
The central bank left its benchmark interest rate unchanged at 1% for the third consecutive month, in a widely expected decision.
Earlier in the week, the Reserve Bank of Australia held its benchmark interest rate at 4.25% earlier Tuesday in a widely expected move, citing the stabilization of the euro zone’s debt crisis and signs of stronger U.S. growth.
The Aussie tumbled to a six-week low against the greenback on Wednesday after official data showed that Australia’s economy expanded by a seasonally adjusted 0.4% in the fourth quarter, disappointing expectations for a 0.7% increase.
Separate reports showed that the number of employed people in Australia fell by 15,400 in February, disappointing expectations for a gain of 5,000 jobs, while the unemployment rate ticked up to 5.2%.
In the week ahead, investors will be continuing to watch developments in Greece, with the euro likely to remain under pressure after Friday’s ISDA ruling. Elsewhere, Australia is to produce official data on home loans while the U.S. is to publish data on retail sales.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 12
The U.S. is to publish government data on the federal budget balance.
Tuesday, March 13
Australia is to produce official data on home loans, a leading gauge of demand in the housing market, as well as a report on business confidence.
The U.S. is to release government data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to produce official data on business inventories, a signal of future business spending.
Also Tuesday, the Federal Reserve is to announce its benchmark interest rate; the announcement will be accompanied by the central bank’s rate statement.
Wednesday, March 14
Australia is to produce a report by the Westpac Banking Corporation on consumer sentiment, a leading indicator of consumer spending.
Later in the day, the U.S. is to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles.
In addition, Federal Reserve Chairman Ben Bernanke is also due to speak; his comments will be closely watched for clues to the future possible direction of monetary policy.
Thursday, March 15
Australia is to publish a report by the Melbourne Institute on inflation expectations, followed by official data on new motor vehicle sales, a sign of consumer confidence.
Later Thursday, the U.S. is to release government data on producer price inflation, a leading indicator of consumer inflation, as well as official data on unemployment claims. The country is also to produce reports on manufacturing activity in New York and Philadelphia, as well as a government report on net long-term securities transactions.
Friday, March 16
The U.S. is to round up the week with government data on consumer price inflation, followed by reports from the Federal Reserve on the capacity utilization rate and industrial production. In addition, the country is also to release preliminary reports by the University of Michigan on consumer sentiment and inflation expectations.
AUD/USD hit 1.0508 on Wednesday, the pair’s lowest since January 25; the pair subsequently consolidated at 1.0574 by close of trade on Friday, tumbling 1.51% over the week.
The pair is likely to find support at 1.0508, Wednesday’s low and resistance at 1.0690, the high of March 6.
The Department of Labor said the U.S. economy added 227,000 jobs in February after increasing by a revised 284,000 the previous month. The unemployment rate held steady at a three year low of 8.3%.
The strong data boosted the dollar as it diminished expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.
A separate report showed that the country’s trade deficit widened unexpectedly in January, falling to USD52.6 billion from a deficit of USD50.4 billion the previous month.
Analysts had expected the trade deficit to narrow to USD48.9 billion in January.
Meanwhile, in Australia, official data showed that the country’s trade balance swung unexpectedly into a deficit of AUD0.67 billion in January, from a surplus of AUD1.33 billion the previous month.
Analysts had expected Australia’s trade surplus to widen to AUD1.52 billion in January.
Earlier Friday, Greece announced that more than 85% of its private creditors had signed up to a debt swap deal, aimed at restructuring 53.5% of the country’s debt. The deal cleared the way for Athens to secure a second bailout worth EUR130 billion and avert a default.
But sentiment was hit after the International Swaps and Derivatives Association said the debt swap constituted a “credit event” that would activate credit-default swaps, which designed to protect investors against losses on Greek sovereign debt.
The risk-related Aussie was also weighed by concerns over the economic outlook for the region after the European Central Bank revised down its forecast for growth in 2012 to a range of between minus 0.5% and 0.3% following Thursday’s policy meeting.
The central bank left its benchmark interest rate unchanged at 1% for the third consecutive month, in a widely expected decision.
Earlier in the week, the Reserve Bank of Australia held its benchmark interest rate at 4.25% earlier Tuesday in a widely expected move, citing the stabilization of the euro zone’s debt crisis and signs of stronger U.S. growth.
The Aussie tumbled to a six-week low against the greenback on Wednesday after official data showed that Australia’s economy expanded by a seasonally adjusted 0.4% in the fourth quarter, disappointing expectations for a 0.7% increase.
Separate reports showed that the number of employed people in Australia fell by 15,400 in February, disappointing expectations for a gain of 5,000 jobs, while the unemployment rate ticked up to 5.2%.
In the week ahead, investors will be continuing to watch developments in Greece, with the euro likely to remain under pressure after Friday’s ISDA ruling. Elsewhere, Australia is to produce official data on home loans while the U.S. is to publish data on retail sales.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 12
The U.S. is to publish government data on the federal budget balance.
Tuesday, March 13
Australia is to produce official data on home loans, a leading gauge of demand in the housing market, as well as a report on business confidence.
The U.S. is to release government data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to produce official data on business inventories, a signal of future business spending.
Also Tuesday, the Federal Reserve is to announce its benchmark interest rate; the announcement will be accompanied by the central bank’s rate statement.
Wednesday, March 14
Australia is to produce a report by the Westpac Banking Corporation on consumer sentiment, a leading indicator of consumer spending.
Later in the day, the U.S. is to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles.
In addition, Federal Reserve Chairman Ben Bernanke is also due to speak; his comments will be closely watched for clues to the future possible direction of monetary policy.
Thursday, March 15
Australia is to publish a report by the Melbourne Institute on inflation expectations, followed by official data on new motor vehicle sales, a sign of consumer confidence.
Later Thursday, the U.S. is to release government data on producer price inflation, a leading indicator of consumer inflation, as well as official data on unemployment claims. The country is also to produce reports on manufacturing activity in New York and Philadelphia, as well as a government report on net long-term securities transactions.
Friday, March 16
The U.S. is to round up the week with government data on consumer price inflation, followed by reports from the Federal Reserve on the capacity utilization rate and industrial production. In addition, the country is also to release preliminary reports by the University of Michigan on consumer sentiment and inflation expectations.