Investing.com - The Australian dollar ended Friday’s session at a three-week low against its U.S. counterpart, after upbeat U.S. manufacturing data fuelled expectations that the Federal Reserve may scale back stimulus measures sooner-than-expected.
AUD/USD hit 0.9422 on Friday, the pair’s lowest since October 10; the pair subsequently consolidated at 0.9436 by close of trade on Friday, down 0.19% on the day and 1.54% lower for the week.
The pair is likely to find support at 0.9390, the low from October 10 and resistance at 0.9526, the high from October 31.
The dollar gained ground after the Institute of Supply Management said its manufacturing purchasing managers’ index rose to 56.4 in October, the highest since April 2011, from 56.2 in September. Economists had expected the index to tick down to 55.0.
The Fed left its USD85 billion-a-month asset purchase program in place following its monthly meeting on Wednesday. The bank gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014.
"The housing sector has slowed somewhat in recent months," the Fed statement said. However, Fed officials stuck to the view that the economy is expanding "at a moderate pace" and said downside risks were diminishing.
The Aussie remained supported following the release of upbeat Chinese manufacturing data. The Asian nation is Australia's biggest export partner.
China's official purchasing managers' index released earlier in the day rose to 51.4 in October, the highest in 18 months, from 51.1 in September.
Meanwhile, in Australia, official data on Friday showed that producer price inflation rose 1.3% in the third quarter, exceeding expectations for a 0.7% uptick.
Those data arrived a day after a report showed that building approvals in Australia climbed 14.4% in September, blowing past expectations for a 2.7% increase.
In the week ahead, investors will be focused on the outcome of Tuesday’s Reserve Bank of Australia policy-setting meeting.
Market players will also look ahead to the release of key U.S. economic data to help assess the timing for a reduction in the Fed’s bond-purchasing program.
On Friday the U.S. is to release the nonfarm payrolls report for October. The U.S. is also to release preliminary data on third quarter economic growth 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, November 4
Australia is to release data on house price inflation and retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is to release data on factory orders, a leading indicator of production.
Tuesday, November 5
The RBA is to announce its benchmark interest rate and publish its rate statement, which contains commentary on the economic conditions affecting the monetary policy decision.
In the U.S., the Institute of Supply Management is to release a report on service sector activity.
Wednesday, November 6
Australia is to produce data on the trade balance.
Thursday, November 7
Australia is to release data on the change in the number of people employed, and the unemployment rate, a leading economic indicator.
The U.S. is to publish a preliminary estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims.
Friday, November 8
The RBA is to publish its monetary policy statement, which outlines economic conditions and the inflation outlook from the bank’s perspective.
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
AUD/USD hit 0.9422 on Friday, the pair’s lowest since October 10; the pair subsequently consolidated at 0.9436 by close of trade on Friday, down 0.19% on the day and 1.54% lower for the week.
The pair is likely to find support at 0.9390, the low from October 10 and resistance at 0.9526, the high from October 31.
The dollar gained ground after the Institute of Supply Management said its manufacturing purchasing managers’ index rose to 56.4 in October, the highest since April 2011, from 56.2 in September. Economists had expected the index to tick down to 55.0.
The Fed left its USD85 billion-a-month asset purchase program in place following its monthly meeting on Wednesday. The bank gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014.
"The housing sector has slowed somewhat in recent months," the Fed statement said. However, Fed officials stuck to the view that the economy is expanding "at a moderate pace" and said downside risks were diminishing.
The Aussie remained supported following the release of upbeat Chinese manufacturing data. The Asian nation is Australia's biggest export partner.
China's official purchasing managers' index released earlier in the day rose to 51.4 in October, the highest in 18 months, from 51.1 in September.
Meanwhile, in Australia, official data on Friday showed that producer price inflation rose 1.3% in the third quarter, exceeding expectations for a 0.7% uptick.
Those data arrived a day after a report showed that building approvals in Australia climbed 14.4% in September, blowing past expectations for a 2.7% increase.
In the week ahead, investors will be focused on the outcome of Tuesday’s Reserve Bank of Australia policy-setting meeting.
Market players will also look ahead to the release of key U.S. economic data to help assess the timing for a reduction in the Fed’s bond-purchasing program.
On Friday the U.S. is to release the nonfarm payrolls report for October. The U.S. is also to release preliminary data on third quarter economic growth 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, November 4
Australia is to release data on house price inflation and retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The U.S. is to release data on factory orders, a leading indicator of production.
Tuesday, November 5
The RBA is to announce its benchmark interest rate and publish its rate statement, which contains commentary on the economic conditions affecting the monetary policy decision.
In the U.S., the Institute of Supply Management is to release a report on service sector activity.
Wednesday, November 6
Australia is to produce data on the trade balance.
Thursday, November 7
Australia is to release data on the change in the number of people employed, and the unemployment rate, a leading economic indicator.
The U.S. is to publish a preliminary estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims.
Friday, November 8
The RBA is to publish its monetary policy statement, which outlines economic conditions and the inflation outlook from the bank’s perspective.
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.