Investing.com - The Australian dollar ended the week close to a two-and-a-half month low against the U.S. dollar on Friday, after an unexpected rate cut by the Reserve Bank of Australia together with weak economic data weighed.
AUD/USD hit 1.0151on Friday, the pair's lowest since July 13; the pair subsequently consolidated at 1.0185 by close of trade, tumbling 1.71% over the week.
The pair is likely to find support at 1.0099, the low of July 12 and resistance at 1.0273, Friday's high.
The Aussie remained lower against the greenback after the U.S. Department of Labor said the economy added 114,000 jobs in September, pushing the unemployment rate down to 7.8% from 8.1% the previous month, the lowest level since January 2009.
The report came after upbeat U.S. data on manufacturing and services earlier in the week and fuelled hopes that the economic recovery may be gaining momentum.
The RBA cut interest rates to 3.25% from 3.5% on Tuesday, the third rate cut in six months, citing a worsening outlook for the global economy and signs of a weakening local labor market.
On Wednesday, official data showed that Australia posted the largest trade deficit in three-and-a-half years in August as export demand slowed.
Also Wednesday, official data showed that growth in China’s service sector moderated in September, underlining concerns over a slowdown in the world’s second largest economy. China is Australia's largest export destination.
Market sentiment had been boosted on Thursday after European Central Bank President Mario Draghi reiterated that the single currency is “irreversible” and said that the bank was ready to buy the debt of distressed euro zone states.
On Tuesday, Spanish Prime Minister Mariano Rajoy downplayed the possibility that Madrid would request a full-scale sovereign bailout, saying it was not certain that the country would ask for external financial assistance.
In the week ahead, market participants will be closely watching the outcome of a meeting of euro zone finance ministers on Tuesday, where a possible bailout for Spain is expected to be on the agenda.
Meanwhile, the U.S. is to publish its weekly report on initial jobless claims, as well as a closely watched report on consumer sentiment. Australia is to publish official data on employment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 8
Australia is to publish a report on job advertisements, an important indicator of demand in the labor market.
Markets in the U.S. are to remain closed for the Columbus Day holiday.
Tuesday, October 9
Australia is to release a report on business confidence, an important indicator of economic health.
Wednesday, October 10
Australia is to publish data on consumer sentiment, a leading indicator of consumer spending.
Later in the day, the U.S. Federal Reserve is to publish its Beige Book, which outlines current economic conditions.
Thursday, October 11
Australia is to publish government data on employment change and the unemployment rate, a leading indicator of economic health. The country is also to release a report on inflation expectations.
The U.S. is also to publish government data on the trade balance, in addition to official data on initial jobless claims, import prices and crude oil stockpiles.
Also Thursday, finance ministers and central bankers from the G7 group of industrialized nations are due to hold talks in Tokyo.
Friday, October 12
The U.S. is to round up the week with official data on producer price inflation, a leading indicator of consumer inflation. In addition, the University of Michigan is to release preliminary data on consumer sentiment, a leading indicator of economic health.
AUD/USD hit 1.0151on Friday, the pair's lowest since July 13; the pair subsequently consolidated at 1.0185 by close of trade, tumbling 1.71% over the week.
The pair is likely to find support at 1.0099, the low of July 12 and resistance at 1.0273, Friday's high.
The Aussie remained lower against the greenback after the U.S. Department of Labor said the economy added 114,000 jobs in September, pushing the unemployment rate down to 7.8% from 8.1% the previous month, the lowest level since January 2009.
The report came after upbeat U.S. data on manufacturing and services earlier in the week and fuelled hopes that the economic recovery may be gaining momentum.
The RBA cut interest rates to 3.25% from 3.5% on Tuesday, the third rate cut in six months, citing a worsening outlook for the global economy and signs of a weakening local labor market.
On Wednesday, official data showed that Australia posted the largest trade deficit in three-and-a-half years in August as export demand slowed.
Also Wednesday, official data showed that growth in China’s service sector moderated in September, underlining concerns over a slowdown in the world’s second largest economy. China is Australia's largest export destination.
Market sentiment had been boosted on Thursday after European Central Bank President Mario Draghi reiterated that the single currency is “irreversible” and said that the bank was ready to buy the debt of distressed euro zone states.
On Tuesday, Spanish Prime Minister Mariano Rajoy downplayed the possibility that Madrid would request a full-scale sovereign bailout, saying it was not certain that the country would ask for external financial assistance.
In the week ahead, market participants will be closely watching the outcome of a meeting of euro zone finance ministers on Tuesday, where a possible bailout for Spain is expected to be on the agenda.
Meanwhile, the U.S. is to publish its weekly report on initial jobless claims, as well as a closely watched report on consumer sentiment. Australia is to publish official data on employment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 8
Australia is to publish a report on job advertisements, an important indicator of demand in the labor market.
Markets in the U.S. are to remain closed for the Columbus Day holiday.
Tuesday, October 9
Australia is to release a report on business confidence, an important indicator of economic health.
Wednesday, October 10
Australia is to publish data on consumer sentiment, a leading indicator of consumer spending.
Later in the day, the U.S. Federal Reserve is to publish its Beige Book, which outlines current economic conditions.
Thursday, October 11
Australia is to publish government data on employment change and the unemployment rate, a leading indicator of economic health. The country is also to release a report on inflation expectations.
The U.S. is also to publish government data on the trade balance, in addition to official data on initial jobless claims, import prices and crude oil stockpiles.
Also Thursday, finance ministers and central bankers from the G7 group of industrialized nations are due to hold talks in Tokyo.
Friday, October 12
The U.S. is to round up the week with official data on producer price inflation, a leading indicator of consumer inflation. In addition, the University of Michigan is to release preliminary data on consumer sentiment, a leading indicator of economic health.