Investing.com - The Australian dollar pulled back from a five-week high against the broadly stronger U.S. dollar on Friday, after better-than-expected U.S. employment report boosted the greenback, while uncertainty over the U.S. presidential elections weighed on demand for higher-yielding, riskier assets.
AUD/USD hit 1.0418 on Friday, the pair’s highest since September 28; the pair subsequently consolidated at 1.0333 by close of trade on Friday, 0.29% lower for the week.
The pair is likely to find support at 1.0256, the low of October 24 and resistance at 1.0418, Friday’s high and a five-week high.
The U.S. Department of Labor said the economy added 171,000 jobs in October, beating forecasts for an increase of 125,000. The unemployment rate ticked up to 7.9% from 7.8% in September as more people re-entered the labor force.
The stronger-than-expected data saw investor’s trim back expectations for another round of quantitative easing by the Federal Reserve, bolstering demand for the greenback.
Demand for the greenback continued to be underpinned by uncertainty over the outcome of Tuesday’s U.S. presidential elections, with opinion polls indicating a dead heat between President Barack Obama and Republican challenger Mitt Romney.
Investors are concerned over the U.S. fiscal cliff, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
Market sentiment was also hit by ongoing uncertainty over when Spain may request a bailout and whether Greece can implement austerity measures in order to secure the next tranche of its bailout funding.
The Aussie had been boosted earlier in the session after encouraging manufacturing data out of China eased concerns over an economic slowdown. China is Australia’s largest trading partner.
On Thursday, official data showed that China’s manufacturing purchasing managers’ index came in at 50.2 in October, up from 49.8 in September, just slightly below forecasts for a reading of 50.3.
A separate report showed that the final reading of China’s HSBC PMI came in at 49.5 in September, an eight month high.
In the coming week, investors will be anticipating the results of Tuesday’s U.S. presidential elections, as well as the outcome of the Reserve Bank of Australia’s policy meeting the same day.
In addition, market participants will be awaiting any further developments in the handling of the debt crisis in the euro zone.
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 publish official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish official data on the trade balance, the difference in value between imports and exports.
In the U.S., the Institute of Supply Management is to publish data on service sector activity.
Tuesday, November 6
The RBA is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank’s rate statement, which contains important insights into current and future economic conditions from the bank’s perspective.
Australia is also to release official data on house price inflation, a leading indicator of demand in the housing sector.
In the U.S, voting in the U.S. presidential elections is to take place.
Wednesday, November 7
The U.S. is to publish government data on crude oil stockpiles.
Thursday, November 8
Australia is to publish official data on employment change and the unemployment rate, a leading indicator of economic strength.
Also Thursday, the U.S. is to publish official data on the trade balance as well as the weekly government report on initial jobless claims.
Friday, November 9
The RBA is to publish its monetary policy statement, which gives investors an insight into the bank’s view on the outlook for growth and inflation.
Elsewhere, China is to publish a flurry of economic data, with reports on producer price inflation, retail sales and industrial production.
The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment, a leading indicator of economic health.
AUD/USD hit 1.0418 on Friday, the pair’s highest since September 28; the pair subsequently consolidated at 1.0333 by close of trade on Friday, 0.29% lower for the week.
The pair is likely to find support at 1.0256, the low of October 24 and resistance at 1.0418, Friday’s high and a five-week high.
The U.S. Department of Labor said the economy added 171,000 jobs in October, beating forecasts for an increase of 125,000. The unemployment rate ticked up to 7.9% from 7.8% in September as more people re-entered the labor force.
The stronger-than-expected data saw investor’s trim back expectations for another round of quantitative easing by the Federal Reserve, bolstering demand for the greenback.
Demand for the greenback continued to be underpinned by uncertainty over the outcome of Tuesday’s U.S. presidential elections, with opinion polls indicating a dead heat between President Barack Obama and Republican challenger Mitt Romney.
Investors are concerned over the U.S. fiscal cliff, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
Market sentiment was also hit by ongoing uncertainty over when Spain may request a bailout and whether Greece can implement austerity measures in order to secure the next tranche of its bailout funding.
The Aussie had been boosted earlier in the session after encouraging manufacturing data out of China eased concerns over an economic slowdown. China is Australia’s largest trading partner.
On Thursday, official data showed that China’s manufacturing purchasing managers’ index came in at 50.2 in October, up from 49.8 in September, just slightly below forecasts for a reading of 50.3.
A separate report showed that the final reading of China’s HSBC PMI came in at 49.5 in September, an eight month high.
In the coming week, investors will be anticipating the results of Tuesday’s U.S. presidential elections, as well as the outcome of the Reserve Bank of Australia’s policy meeting the same day.
In addition, market participants will be awaiting any further developments in the handling of the debt crisis in the euro zone.
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 publish official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish official data on the trade balance, the difference in value between imports and exports.
In the U.S., the Institute of Supply Management is to publish data on service sector activity.
Tuesday, November 6
The RBA is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank’s rate statement, which contains important insights into current and future economic conditions from the bank’s perspective.
Australia is also to release official data on house price inflation, a leading indicator of demand in the housing sector.
In the U.S, voting in the U.S. presidential elections is to take place.
Wednesday, November 7
The U.S. is to publish government data on crude oil stockpiles.
Thursday, November 8
Australia is to publish official data on employment change and the unemployment rate, a leading indicator of economic strength.
Also Thursday, the U.S. is to publish official data on the trade balance as well as the weekly government report on initial jobless claims.
Friday, November 9
The RBA is to publish its monetary policy statement, which gives investors an insight into the bank’s view on the outlook for growth and inflation.
Elsewhere, China is to publish a flurry of economic data, with reports on producer price inflation, retail sales and industrial production.
The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment, a leading indicator of economic health.