Investing.com - The Australian dollar ended Friday’s session at a two-week high against its U.S. counterpart, amid fears that the government shutdown in the U.S. would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
AUD/USD hit 0.9458 on Friday, the pair’s highest since September 20; the pair subsequently consolidated at 0.9432 by close of trade on Friday, up 0.41% on the day and 1.22% higher for the week.
The pair is likely to find support at 0.9333, the low from October 2 and resistance at 0.9524, the high from September 19.
House Republican leader John Boehner said Friday the House will not vote on a budget bill without conditions and demanded spending cuts in exchange for raising the government's borrowing limit.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Moody's Investors Service warned that a failure to raise the debt limit would result in a worse outcome for financial markets than a government shutdown.
Friday's highly-anticipated non-farm payrolls report for September was postponed due to the U.S. government shutdown, and no new date was given for the release of the data.
Meanwhile, the Aussie remained supported as traders saw a reduced chance the Reserve Bank of Australia will lower interest rates again in the near-term.
The RBA held its benchmark interest rate at a record low 2.50% earlier in the week, saying that earlier rate cuts are still filtering through the economy.
On the data front, a government report released Wednesday showed that the number of Australian building permits issued in August fell 4.7% from a month earlier, following a 10.2% increase in July. Analysts had expected building permits to decline 2%.
Separately, data on Wednesday showed that the country posted a deficit of AUD0.82 billion in August from a revised deficit of AUD1.38 billion in July. Economists had expected the trade deficit to contract to AUD0.45 billion.
In addition, official data released Tuesday showed that retail sales in Australia rose 0.4% in August, beating expectations for a 0.3% increase, after a 0.1% rise the previous month.
In the week ahead, investors will be looking ahead to Wednesday’s minutes of the Federal Reserve’s most recent policy-setting meeting, amid ongoing uncertainty over when the central bank will begin tapering its USD85 billion a month asset purchase program.
The Fed took markets by surprise last month with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
Markets will also be watching developments in U.S. budget negotiations.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday as there are no relevant events on this day.
Monday, October 7
Markets in Australia are to remain closed for a national holiday.
Tuesday, October 8
Australia is to publish a report on job advertisements.
Wednesday, October 9
Australia is to publish a report on consumer sentiment, a leading indicator of consumer spending, as well as data on business confidence.
Thursday, October 10
Australia is to produce official data on the change in the number of people unemployed and the unemployment rate.
AUD/USD hit 0.9458 on Friday, the pair’s highest since September 20; the pair subsequently consolidated at 0.9432 by close of trade on Friday, up 0.41% on the day and 1.22% higher for the week.
The pair is likely to find support at 0.9333, the low from October 2 and resistance at 0.9524, the high from September 19.
House Republican leader John Boehner said Friday the House will not vote on a budget bill without conditions and demanded spending cuts in exchange for raising the government's borrowing limit.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Moody's Investors Service warned that a failure to raise the debt limit would result in a worse outcome for financial markets than a government shutdown.
Friday's highly-anticipated non-farm payrolls report for September was postponed due to the U.S. government shutdown, and no new date was given for the release of the data.
Meanwhile, the Aussie remained supported as traders saw a reduced chance the Reserve Bank of Australia will lower interest rates again in the near-term.
The RBA held its benchmark interest rate at a record low 2.50% earlier in the week, saying that earlier rate cuts are still filtering through the economy.
On the data front, a government report released Wednesday showed that the number of Australian building permits issued in August fell 4.7% from a month earlier, following a 10.2% increase in July. Analysts had expected building permits to decline 2%.
Separately, data on Wednesday showed that the country posted a deficit of AUD0.82 billion in August from a revised deficit of AUD1.38 billion in July. Economists had expected the trade deficit to contract to AUD0.45 billion.
In addition, official data released Tuesday showed that retail sales in Australia rose 0.4% in August, beating expectations for a 0.3% increase, after a 0.1% rise the previous month.
In the week ahead, investors will be looking ahead to Wednesday’s minutes of the Federal Reserve’s most recent policy-setting meeting, amid ongoing uncertainty over when the central bank will begin tapering its USD85 billion a month asset purchase program.
The Fed took markets by surprise last month with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
Markets will also be watching developments in U.S. budget negotiations.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday as there are no relevant events on this day.
Monday, October 7
Markets in Australia are to remain closed for a national holiday.
Tuesday, October 8
Australia is to publish a report on job advertisements.
Wednesday, October 9
Australia is to publish a report on consumer sentiment, a leading indicator of consumer spending, as well as data on business confidence.
Thursday, October 10
Australia is to produce official data on the change in the number of people unemployed and the unemployment rate.