Investing.com - The Australian dollar fell against its U.S. counterpart on Friday, trimming some of the week’s gains as renewed concerns over the debt crisis in the euro zone weighed on demand for riskier assets.
AUD/USD hit 1.0855 on Wednesday, the pair’s highest since August 2; the pair subsequently consolidated at 1.0729 by close of trade on Friday, adding 0.23% over the week.
The pair is likely to find support at 1.0650, the low of February 27 and resistance at 1.0855, the high of February 29.
Sentiment was hit after official data showed on Friday that German retail sales fell by 1.6% in January, against expectations for a 0.5% increase, sparking fresh concerns over the outlook for the euro zone’s largest economy.
Markets were also jittery as Spain’s government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared to a previous target of 4.4%.
The Aussie rallied to a seven-month high against the greenback on Wednesday before erasing gains as risk appetite weakened after the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, amid concerns that the action was equivalent to quantitative easing.
Meanwhile, the U.S. dollar was broadly supported after Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony to Congress on Wednesday, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Other reports painted a mixed picture of the U.S. economic recovery. Data on Tuesday showed that U.S. durable goods orders dropped to a three-year low in January.
The Institute for Supply Management said Thursday that U.S. manufacturing activity expanded at a slower rate than expected in February, while official data showed that U.S. initial jobless claims declined modestly in the previous week, holding close to the lowest level since March 2008.
In Australia, official data showed on Thursday that building approvals rose far less-than-expected in January, while a separate report indicated that private capital expenditure in Australia fell unexpectedly in the fourth quarter.
In the week ahead, investors will be looking ahead to Friday’s data on U.S. non-farm payrolls, to gauge the strength of the country’s economic recovery. Market participants will also be continuing to watch developments in Europe, ahead of interest rate announcements by the ECB on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 5
Australia is to release official data on company operating profits, an important indicator of economic health. The country is also to release industry data on service sector activity and a report on job advertisements, an important gauge of demand in the labor market.
Later Monday, the U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.
Tuesday, March 6
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which contains important insights into current economic conditions from the bank’s perspective. Australia is also to publish a report on the country’s current account.
Wednesday, March 7
Australia is to produce official data on fourth quarter GDP, the broadest measure of economic activity and the primary indicator of the economy's health.
The U.S. is to publish a report on ADP non-farm payrolls, which leads government data by two days. The country is also to release revised data on non-farm productivity and labor costs, which are important inflationary indicators, as well as a report on crude oil stockpiles.
Thursday, March 8
Australia is to release official data on the change in the number of people employed as well as data on the overall unemployment rate, a leading indicator of economic health.
Also Thursday, the U.S. is to produce government data on initial jobless claims, a leading indicator of economic health.
Friday, March 9
Australia is to produce official data on the trade balance, the difference in value between imported and exported goods.
The U.S. is to round up the week with government data on non-farm payrolls and the unemployment rate, leading indicators of economic health, in addition to data on the trade balance and average hourly earnings.
AUD/USD hit 1.0855 on Wednesday, the pair’s highest since August 2; the pair subsequently consolidated at 1.0729 by close of trade on Friday, adding 0.23% over the week.
The pair is likely to find support at 1.0650, the low of February 27 and resistance at 1.0855, the high of February 29.
Sentiment was hit after official data showed on Friday that German retail sales fell by 1.6% in January, against expectations for a 0.5% increase, sparking fresh concerns over the outlook for the euro zone’s largest economy.
Markets were also jittery as Spain’s government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared to a previous target of 4.4%.
The Aussie rallied to a seven-month high against the greenback on Wednesday before erasing gains as risk appetite weakened after the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, amid concerns that the action was equivalent to quantitative easing.
Meanwhile, the U.S. dollar was broadly supported after Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony to Congress on Wednesday, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Other reports painted a mixed picture of the U.S. economic recovery. Data on Tuesday showed that U.S. durable goods orders dropped to a three-year low in January.
The Institute for Supply Management said Thursday that U.S. manufacturing activity expanded at a slower rate than expected in February, while official data showed that U.S. initial jobless claims declined modestly in the previous week, holding close to the lowest level since March 2008.
In Australia, official data showed on Thursday that building approvals rose far less-than-expected in January, while a separate report indicated that private capital expenditure in Australia fell unexpectedly in the fourth quarter.
In the week ahead, investors will be looking ahead to Friday’s data on U.S. non-farm payrolls, to gauge the strength of the country’s economic recovery. Market participants will also be continuing to watch developments in Europe, ahead of interest rate announcements by the ECB on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 5
Australia is to release official data on company operating profits, an important indicator of economic health. The country is also to release industry data on service sector activity and a report on job advertisements, an important gauge of demand in the labor market.
Later Monday, the U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.
Tuesday, March 6
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which contains important insights into current economic conditions from the bank’s perspective. Australia is also to publish a report on the country’s current account.
Wednesday, March 7
Australia is to produce official data on fourth quarter GDP, the broadest measure of economic activity and the primary indicator of the economy's health.
The U.S. is to publish a report on ADP non-farm payrolls, which leads government data by two days. The country is also to release revised data on non-farm productivity and labor costs, which are important inflationary indicators, as well as a report on crude oil stockpiles.
Thursday, March 8
Australia is to release official data on the change in the number of people employed as well as data on the overall unemployment rate, a leading indicator of economic health.
Also Thursday, the U.S. is to produce government data on initial jobless claims, a leading indicator of economic health.
Friday, March 9
Australia is to produce official data on the trade balance, the difference in value between imported and exported goods.
The U.S. is to round up the week with government data on non-farm payrolls and the unemployment rate, leading indicators of economic health, in addition to data on the trade balance and average hourly earnings.