Investing.com - The Australian dollar ended the week sharply higher against its U.S. counterpart on Friday, as risk sentiment was boosted by new European measures designed to curb the effects of the region's debt crisis.
AUD/USD hit 1.0752 on Thursday, the pair's highest since September 1; the pair subsequently consolidated at 1.0698 by close of trade on Friday, surging 3.42% over the week.
The pair is likely to find support at 1.0511, the low of September 5 and resistance at 1.0876, the high of July 25.
The Aussie jumped to a two-month high on Thursday, after European leaders reached an agreement with private banks on a voluntary 50% reduction of Greece's debt.
The leaders also agreed to scale up the euro zone's bailout fund, the European Financial Stability Facility, to EUR1 trillion and to recapitalize European banks by EUR106 billion, though they did not say how the money would be provided.
Market sentiment also strengthened after official data showed that U.S. gross domestic product rose by 2.5% in the third quarter, the fastest rate of increase since the third quarter of 2010.
The reading nearly doubled growth of 1.3% recorded in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.
But risk appetite slightly weakened on Friday, after ratings agency Fitch said that writedowns on Greek debt would indicate a default and after Italy’s borrowing costs rose to a euro lifetime high, following an auction of government debt.
The Aussie also came under pressure amid growing speculation that the Australian Reserve Bank may cut rates on Tuesday.
In the week ahead, investors will be focusing on the Federal Reserve’s policy meeting on Wednesday and Friday’s U.S. nonfarm payrolls data. Elsewhere, the Reserve Bank of Australia is due to announce its benchmark interest rate.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 31
Australian is to release official data on private sector credit as well as a report on inflation expectations.
Later Monday, the U.S is to produce a report on manufacturing activity in the Chicago area, an important indicator of economic health.
Tuesday, November 1
Australia is to publish official data on house price inflation, a leading indicator of the housing industry's health, as well as a report on commodity prices. Meanwhile, the Reserve Bank of Australia is to announce its benchmark interest rate.
Elsewhere, the Institute of Supply Management is to produce a report on U.S. manufacturing activity, a leading indicator of economic health.
Wednesday, November 2
Australia is to publish official data on building approvals, an important indicator of future construction activity.
Later Wednesday, the U.S. is to release private sector data on non-farm payrolls that leads government data by two days as well as a government report on crude oil stockpiles. In addition, the Federal Reserve is to announce its benchmark interest rate. The bank’s post-policy meeting press conference will be closely watched for indications to the future possible direction of monetary policy.
Thursday, November 3
Leaders from the G-20 group of industrialized nations are to hold talks to discuss a range of global economic topics, including the financial crisis in the euro zone, in Cannes.
Australia is to publish a report on service sector activity, as well as official data on retail sales.
Later in the day, the U.S. is to produce its weekly report on initial jobless claims as well as government data on factory orders. The U.S. is also to publish preliminary data on nonfarm productivity and labor costs, important inflationary indicators. In addition the ISM is to release a report on service sector activity, a leading indicator of economic health.
Friday, November 4
The RBA is to release its monetary policy statement, which contains important insights into current economic conditions from the bank’s perspective.
The U.S. is to round up the week with its closely watched government report on nonfarm payrolls, in addition to official data on the unemployment rate and average hourly earnings.
Meanwhile, G-20 leaders are to meet for a second day in Cannes.
AUD/USD hit 1.0752 on Thursday, the pair's highest since September 1; the pair subsequently consolidated at 1.0698 by close of trade on Friday, surging 3.42% over the week.
The pair is likely to find support at 1.0511, the low of September 5 and resistance at 1.0876, the high of July 25.
The Aussie jumped to a two-month high on Thursday, after European leaders reached an agreement with private banks on a voluntary 50% reduction of Greece's debt.
The leaders also agreed to scale up the euro zone's bailout fund, the European Financial Stability Facility, to EUR1 trillion and to recapitalize European banks by EUR106 billion, though they did not say how the money would be provided.
Market sentiment also strengthened after official data showed that U.S. gross domestic product rose by 2.5% in the third quarter, the fastest rate of increase since the third quarter of 2010.
The reading nearly doubled growth of 1.3% recorded in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.
But risk appetite slightly weakened on Friday, after ratings agency Fitch said that writedowns on Greek debt would indicate a default and after Italy’s borrowing costs rose to a euro lifetime high, following an auction of government debt.
The Aussie also came under pressure amid growing speculation that the Australian Reserve Bank may cut rates on Tuesday.
In the week ahead, investors will be focusing on the Federal Reserve’s policy meeting on Wednesday and Friday’s U.S. nonfarm payrolls data. Elsewhere, the Reserve Bank of Australia is due to announce its benchmark interest rate.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 31
Australian is to release official data on private sector credit as well as a report on inflation expectations.
Later Monday, the U.S is to produce a report on manufacturing activity in the Chicago area, an important indicator of economic health.
Tuesday, November 1
Australia is to publish official data on house price inflation, a leading indicator of the housing industry's health, as well as a report on commodity prices. Meanwhile, the Reserve Bank of Australia is to announce its benchmark interest rate.
Elsewhere, the Institute of Supply Management is to produce a report on U.S. manufacturing activity, a leading indicator of economic health.
Wednesday, November 2
Australia is to publish official data on building approvals, an important indicator of future construction activity.
Later Wednesday, the U.S. is to release private sector data on non-farm payrolls that leads government data by two days as well as a government report on crude oil stockpiles. In addition, the Federal Reserve is to announce its benchmark interest rate. The bank’s post-policy meeting press conference will be closely watched for indications to the future possible direction of monetary policy.
Thursday, November 3
Leaders from the G-20 group of industrialized nations are to hold talks to discuss a range of global economic topics, including the financial crisis in the euro zone, in Cannes.
Australia is to publish a report on service sector activity, as well as official data on retail sales.
Later in the day, the U.S. is to produce its weekly report on initial jobless claims as well as government data on factory orders. The U.S. is also to publish preliminary data on nonfarm productivity and labor costs, important inflationary indicators. In addition the ISM is to release a report on service sector activity, a leading indicator of economic health.
Friday, November 4
The RBA is to release its monetary policy statement, which contains important insights into current economic conditions from the bank’s perspective.
The U.S. is to round up the week with its closely watched government report on nonfarm payrolls, in addition to official data on the unemployment rate and average hourly earnings.
Meanwhile, G-20 leaders are to meet for a second day in Cannes.