Investing.com - The Australian dollar ended Friday’s session lower against its U.S. counterpart, moving further away from a three-month high hit earlier in the week, after a senior Federal Reserve official indicated that the bank could start to reduce its stimulus program in October.
AUD/USD hit 0.9528 on Wednesday, the pair’s highest since June 19; the pair subsequently consolidated at 0.9397 by close of trade on Friday, down 0.46% on the day but still 1.6% higher for the week.
The pair is likely to find support at 0.9286, the low from September 17 and resistance at 0.9528, Wednesday’s high a three-month high.
The Australian dollar rallied against the greenback on Wednesday after the Fed decided to leave its USD85 billion-a-month stimulus program unchanged.
The decision surprised markets, which had been expecting the central bank to taper its monthly stimulus program by USD10 billion to USD15 billion.
In a press conference following the Fed statement, Chairman Ben Bernanke reiterated that the plan to taper asset purchases was never a "preset course," and added that the bank's decision was dependent on how the economic recovery continues to progress.
The central bank also repeated its ongoing goal to keep low interest rates in place until the unemployment rate falls to around 6.5%, as long as inflation doesn't accelerate beyond 2.5% a year.
But the greenback regained strength on Friday after St. Louis Fed President James Bullard said the decision not to taper in September was “close” and did not rule out a small reduction in the central bank's bond purchases in October.
The Fed will hold its next monetary policy meeting on Oct. 29-30.
Meanwhile, in Australia, minutes from the Reserve Bank of Australia’s September 3 policy meeting showed that the central bank retains the option of reducing interest rates and said a further drop in the Australian dollar would help the economy.
In the week ahead, uncertainty over the direction of Federal Reserve policy and the decision over Chairman Ben Bernanke’s eventual successor look likely to weigh on the dollar.
Market players will also be closely watching a preliminary reading of China’s HSBC manufacturing index on Monday, to gauge the strength of the world’s second largest economy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 23
China is to release the preliminary reading of its HSBC manufacturing index, a leading economic indicator. The Asian nation is Australia’s largest trading partner.
Tuesday, September 24
The U.S. is to release private sector data on house price inflation, as well as a closely watched report on consumer confidence.
Wednesday, September 25
The Reserve Bank of Australia is to publish its bi-annual financial stability review.
The U.S. is to release data on durable goods orders, a leading indicator of production, in addition to a report on new home sales.
Thursday, September 26
The U.S. is to release the weekly report on initial jobless claims, as well as final data on second quarter growth and private sector data on pending home sales.
Friday, September 27
The U.S. is to round up the week with revised data on consumer sentiment and inflation expectations from the University of Michigan, as well as data on personal income and expenditure.
AUD/USD hit 0.9528 on Wednesday, the pair’s highest since June 19; the pair subsequently consolidated at 0.9397 by close of trade on Friday, down 0.46% on the day but still 1.6% higher for the week.
The pair is likely to find support at 0.9286, the low from September 17 and resistance at 0.9528, Wednesday’s high a three-month high.
The Australian dollar rallied against the greenback on Wednesday after the Fed decided to leave its USD85 billion-a-month stimulus program unchanged.
The decision surprised markets, which had been expecting the central bank to taper its monthly stimulus program by USD10 billion to USD15 billion.
In a press conference following the Fed statement, Chairman Ben Bernanke reiterated that the plan to taper asset purchases was never a "preset course," and added that the bank's decision was dependent on how the economic recovery continues to progress.
The central bank also repeated its ongoing goal to keep low interest rates in place until the unemployment rate falls to around 6.5%, as long as inflation doesn't accelerate beyond 2.5% a year.
But the greenback regained strength on Friday after St. Louis Fed President James Bullard said the decision not to taper in September was “close” and did not rule out a small reduction in the central bank's bond purchases in October.
The Fed will hold its next monetary policy meeting on Oct. 29-30.
Meanwhile, in Australia, minutes from the Reserve Bank of Australia’s September 3 policy meeting showed that the central bank retains the option of reducing interest rates and said a further drop in the Australian dollar would help the economy.
In the week ahead, uncertainty over the direction of Federal Reserve policy and the decision over Chairman Ben Bernanke’s eventual successor look likely to weigh on the dollar.
Market players will also be closely watching a preliminary reading of China’s HSBC manufacturing index on Monday, to gauge the strength of the world’s second largest economy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 23
China is to release the preliminary reading of its HSBC manufacturing index, a leading economic indicator. The Asian nation is Australia’s largest trading partner.
Tuesday, September 24
The U.S. is to release private sector data on house price inflation, as well as a closely watched report on consumer confidence.
Wednesday, September 25
The Reserve Bank of Australia is to publish its bi-annual financial stability review.
The U.S. is to release data on durable goods orders, a leading indicator of production, in addition to a report on new home sales.
Thursday, September 26
The U.S. is to release the weekly report on initial jobless claims, as well as final data on second quarter growth and private sector data on pending home sales.
Friday, September 27
The U.S. is to round up the week with revised data on consumer sentiment and inflation expectations from the University of Michigan, as well as data on personal income and expenditure.