Forex - AUD/USD weekly outlook: March 2 - 6

Investing.com - The Australian dollar moved away from a one-month high against its U.S. counterpart on Friday, as traders mulled the timing of a Federal Reserve rate hike after data showed the U.S. economy expanded modestly in the last quarter of 2014.

AUD/USD hit 0.7912 on Thursday, the pair's highest since January 28, before subsequently consolidating at 0.7808 by close of trade on Friday, up 0.06% for the day but 0.44% lower for the week.

The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 2.2% in the last three months of 2014, down from an initial estimate of 2.6% but ahead of expectations for a downward revision to 2.1% growth.

Other reports showed that U.S. pending home sales rose to a one-and-a-half year high in January and consumer sentiment remained strong last month.

The February reading of the University of Michigan's consumer sentiment index was revised up to 95.4 from the preliminary reading of 93.6. While this was down from the previous month final reading of 98.1, it was the second highest level since January 2007.

The mostly upbeat numbers came after stronger-than-forecast data on U.S. durable goods orders on Thursday, which added to indications that the economic recovery is on track.

Earlier in the week, Federal Reserve Chair Janet Yellen said that if the economy keeps improving as the bank expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.

Meanwhile, in China, official data released over the weekend showed that activity in the country's factory sector contracted for a second straight month in February.

China's manufacturing purchasing managers' index released Sunday rose to 49.9 in February, just above expectations for a reading of 49.7 and up slightly from a two-year low of 49.8 in January.

On Saturday, the People's Bank of China cut its benchmark interest rate by a quarter percentage point to 5.35%.

It was the second rate cut in less than four months, indicating that Beijing is becoming more aggressive in supporting the economy as its momentum slows and deflation risks rise.

The Asian nation is Australia's largest trade partner.

In the week ahead investors will be focusing on the outcome of a policy meeting of the Reserve Bank of Australia on Tuesday, which is to be followed by the U.S. jobs report for February on Friday.

Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.

Monday, March 2

Australia is to release a report on company operating profits.

China is to publish the revised reading of the HSBC manufacturing index.

In the U.S., the Institute of Supply Management is to report on manufacturing activity.

Tuesday, March 3

The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.

Australia is also to release reports on building approvals and the current account.

Wednesday, March 4

Australia is to release data on fourth quarter GDP growth.

China is to publish the HSBC services index.

The U.S. is to release the ADP non-farm payrolls report, while looks at private sector jobs growth. Later in the day, the ISM is to report on services sector activity.

Thursday, March 5

Australia is to publish report on retail sales and the trade balance.

The U.S. is to release the weekly report on initial jobless claims and data on factory orders.

Friday, March 6

The U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings.