Investing.com - The Australian dollar ended Friday’s session at a seven-week high against its U.S. counterpart, as hopes that Cyprus was growing closer to a deal on an alternative bailout agreement boosted appetite for riskier assets.
AUD/USD hit 1.0459 on Friday, the pair’s highest since January 30; the pair subsequently consolidated at 1.0441 by close of trade, up 0.35% for the week.
The pair is likely to find support at 1.0362, Thursday’s low and resistance at 1.0474, the high from January 30.
Market sentiment strengthened Friday as political leaders in Cyprus prepared to pass legislation to restructure the country’s banking sector and impose capital controls.
The European Central Bank said Thursday that it will cut off liquidity to Cypriot banks on Monday if an agreement with the European Union and the International Monetary Fund on an alternative bailout solution is not in place.
The EU and the IMF have offered a EUR10 billion bailout loan to Cyprus, but insisted that the country find a way to raise EUR5.8 billion in exchange for financial aid.
A previous agreement that included a levy on deposits in Cypriot banks was rejected by the country's parliament on Tuesday.
Appetite for growth-linked assets received an additional boost amid indications that China’s economic recovery is still on track after data on Thursday showed that China’s HSBC purchasing managers' index rose to 51.7 in March from 50.4 in February.
China is Australia's biggest export partner.
The U.S. dollar came under pressure amid indications the Federal Reserve will keep its loose monetary policy in place for the indefinite future, despite signs of a strengthening U.S. economy.
The U.S. central bank announced Wednesday that it will leave its asset-purchase program unchanged, citing concerns over high unemployment levels and risks from tax increases and federal government spending cuts.
Fed officials reaffirmed their commitment to keeping monetary policy accommodative at least until unemployment falls to 6.5%. The current unemployment rate is 7.7%.
Meanwhile, the minutes of the Reserve Bank of Australia's latest policy meeting released earlier in the week showed that policymakers believe there are signs the economy is responding to low interest rates.
In addition, central bank Deputy Governor Philip Lowe defended a higher exchange rate and savings level, saying they helped stabilize the economy.
Elsewhere, the Aussie was lower against the euro on Friday, with EUR/AUD adding 0.66% to hit 1.2435.
In the week ahead investors will be closely monitoring developments in Cyprus as a failure to reach a deal could see the country exit the euro zone.
The U.S. is to release a flurry of data including reports on durable goods orders, home sales and consumer confidence.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 25
Federal Reserve Chairman Ben Bernanke is to speak at an event in London; his comments will be closely watched for any indication of the possible future direction of monetary policy.
Tuesday, March 26
Reserve Bank of Australia Governor Glenn Stevens is to speak; his comments will be closely watched by investors.
Later Tuesday, the U.S. is to release a flurry of economic data with government reports on durable goods orders and new home sales as well as a report on consumer confidence.
Wednesday, March 27
The RBA is to produce its financial stability review, which looks at conditions in the country’s financial system.
The U.S. is to produce industry data in pending home sales and a government report on crude oil stockpiles.
Thursday, March 28
Australia is to release official data on private sector credit.
The U.S. is to release the weekly government report on initial jobless claims and revised data on fourth quarter economic growth.
Friday, March 29
Markets in Australia are to remain closed in observance of Good Friday.
The U.S. is to round up the week with official data on personal spending and expenditure and revised data form the University of Michigan on consumer sentiment and inflation expectations.
AUD/USD hit 1.0459 on Friday, the pair’s highest since January 30; the pair subsequently consolidated at 1.0441 by close of trade, up 0.35% for the week.
The pair is likely to find support at 1.0362, Thursday’s low and resistance at 1.0474, the high from January 30.
Market sentiment strengthened Friday as political leaders in Cyprus prepared to pass legislation to restructure the country’s banking sector and impose capital controls.
The European Central Bank said Thursday that it will cut off liquidity to Cypriot banks on Monday if an agreement with the European Union and the International Monetary Fund on an alternative bailout solution is not in place.
The EU and the IMF have offered a EUR10 billion bailout loan to Cyprus, but insisted that the country find a way to raise EUR5.8 billion in exchange for financial aid.
A previous agreement that included a levy on deposits in Cypriot banks was rejected by the country's parliament on Tuesday.
Appetite for growth-linked assets received an additional boost amid indications that China’s economic recovery is still on track after data on Thursday showed that China’s HSBC purchasing managers' index rose to 51.7 in March from 50.4 in February.
China is Australia's biggest export partner.
The U.S. dollar came under pressure amid indications the Federal Reserve will keep its loose monetary policy in place for the indefinite future, despite signs of a strengthening U.S. economy.
The U.S. central bank announced Wednesday that it will leave its asset-purchase program unchanged, citing concerns over high unemployment levels and risks from tax increases and federal government spending cuts.
Fed officials reaffirmed their commitment to keeping monetary policy accommodative at least until unemployment falls to 6.5%. The current unemployment rate is 7.7%.
Meanwhile, the minutes of the Reserve Bank of Australia's latest policy meeting released earlier in the week showed that policymakers believe there are signs the economy is responding to low interest rates.
In addition, central bank Deputy Governor Philip Lowe defended a higher exchange rate and savings level, saying they helped stabilize the economy.
Elsewhere, the Aussie was lower against the euro on Friday, with EUR/AUD adding 0.66% to hit 1.2435.
In the week ahead investors will be closely monitoring developments in Cyprus as a failure to reach a deal could see the country exit the euro zone.
The U.S. is to release a flurry of data including reports on durable goods orders, home sales and consumer confidence.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 25
Federal Reserve Chairman Ben Bernanke is to speak at an event in London; his comments will be closely watched for any indication of the possible future direction of monetary policy.
Tuesday, March 26
Reserve Bank of Australia Governor Glenn Stevens is to speak; his comments will be closely watched by investors.
Later Tuesday, the U.S. is to release a flurry of economic data with government reports on durable goods orders and new home sales as well as a report on consumer confidence.
Wednesday, March 27
The RBA is to produce its financial stability review, which looks at conditions in the country’s financial system.
The U.S. is to produce industry data in pending home sales and a government report on crude oil stockpiles.
Thursday, March 28
Australia is to release official data on private sector credit.
The U.S. is to release the weekly government report on initial jobless claims and revised data on fourth quarter economic growth.
Friday, March 29
Markets in Australia are to remain closed in observance of Good Friday.
The U.S. is to round up the week with official data on personal spending and expenditure and revised data form the University of Michigan on consumer sentiment and inflation expectations.