Investing.com – Last week saw the Australian dollar tumble to a nine-month low against its U.S. counterpart, falling below parity as mounting fears that the global economy was slipping back into recession reduced the appeal of growth-linked currencies.
AUD/USD hit 0.9677 on Friday, the lowest since December 2, 2010; the pair subsequently consolidated at 0.9776 by close of trade on Friday, plunging 5.05% on the week, the biggest weekly drop since May 2010.
The pair was likely to find short-term support at 0.9677, Friday’s low and a ten-month low and resistance at 1.0078, Thursday’s high.
The Australian dollar fell sharply on Wednesday after the Federal Reserve warned of “significant downside risks” facing the U.S. economy and announced fresh measures to boost growth.
The Fed unveiled a plan to trade short-term bonds for long-term ones, in an attempt to boost the economy by pushing down long-term interest rates, a move dubbed “Operation Twist.”
The Aussie added to heavy losses on Thursday after a preliminary reading of the HSBC China purchasing managers' index fell to a two-month low of 49.4 in September, remaining in contraction territory for the third consecutive month. China is Australia’s largest export destination.
A separate report showing that manufacturing activity in the euro zone fell to the lowest since August 2009 in September underlined fears over a slowdown in global growth.
The Aussie came under further pressure after gold and copper prices plunged on the New York Mercantile Exchange, reducing the outlook for the nation’s commodity exports.
The Australian dollar eased off an 11-month low on Friday after financial leaders from the Group of 20 nations said they would take "all steps necessary" to calm the global financial system and said central banks were ready to provide liquidity, after holding talks in Washington.
Also last week, the minutes of the Reserve Bank of Australia’s September policy meeting showed that policymakers believed it was better to keep rates steady in the light of uncertainty over the global outlook, easing concerns over possible rate cuts by the central bank.
In the week ahead, developments in Greece look likely to remain in focus while investors will be closely watching U.S. data on second quarter economic growth in order to gauge the strength of the U.S. economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 26
The U.S. is to produce government data on new home sales, a leading indicator of economic health.
Tuesday, September 27
The U.S. is to publish industry data on house prices, as well as a report on consumer confidence, a leading indicator of consumer spending.
Wednesday, September 28
Australia is to release industry data on new home sales.
Later in the day, the U.S. is to produce official data on durable goods orders, a leading indicator of production. The country is also to publish government data on crude oil stockpiles, while Fed Chairman Ben Bernanke is to speak; his comments will be closely watched for clues regarding future monetary policy.
Thursday, September 29
The U.S. is to publish its weekly report on initial jobless claims, as well as industry data on pending home sales. The country is also to publish revised data on second quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health.
Friday, September 30
Australia is to produce official data on private sector credit.
The U.S. is to round up the week with official data on personal spending and inflation as well as a report on manufacturing activity in the Chicago area. Meanwhile, the University of Michigan is to publish revised data on consumer sentiment and inflation expectations.
AUD/USD hit 0.9677 on Friday, the lowest since December 2, 2010; the pair subsequently consolidated at 0.9776 by close of trade on Friday, plunging 5.05% on the week, the biggest weekly drop since May 2010.
The pair was likely to find short-term support at 0.9677, Friday’s low and a ten-month low and resistance at 1.0078, Thursday’s high.
The Australian dollar fell sharply on Wednesday after the Federal Reserve warned of “significant downside risks” facing the U.S. economy and announced fresh measures to boost growth.
The Fed unveiled a plan to trade short-term bonds for long-term ones, in an attempt to boost the economy by pushing down long-term interest rates, a move dubbed “Operation Twist.”
The Aussie added to heavy losses on Thursday after a preliminary reading of the HSBC China purchasing managers' index fell to a two-month low of 49.4 in September, remaining in contraction territory for the third consecutive month. China is Australia’s largest export destination.
A separate report showing that manufacturing activity in the euro zone fell to the lowest since August 2009 in September underlined fears over a slowdown in global growth.
The Aussie came under further pressure after gold and copper prices plunged on the New York Mercantile Exchange, reducing the outlook for the nation’s commodity exports.
The Australian dollar eased off an 11-month low on Friday after financial leaders from the Group of 20 nations said they would take "all steps necessary" to calm the global financial system and said central banks were ready to provide liquidity, after holding talks in Washington.
Also last week, the minutes of the Reserve Bank of Australia’s September policy meeting showed that policymakers believed it was better to keep rates steady in the light of uncertainty over the global outlook, easing concerns over possible rate cuts by the central bank.
In the week ahead, developments in Greece look likely to remain in focus while investors will be closely watching U.S. data on second quarter economic growth in order to gauge the strength of the U.S. economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 26
The U.S. is to produce government data on new home sales, a leading indicator of economic health.
Tuesday, September 27
The U.S. is to publish industry data on house prices, as well as a report on consumer confidence, a leading indicator of consumer spending.
Wednesday, September 28
Australia is to release industry data on new home sales.
Later in the day, the U.S. is to produce official data on durable goods orders, a leading indicator of production. The country is also to publish government data on crude oil stockpiles, while Fed Chairman Ben Bernanke is to speak; his comments will be closely watched for clues regarding future monetary policy.
Thursday, September 29
The U.S. is to publish its weekly report on initial jobless claims, as well as industry data on pending home sales. The country is also to publish revised data on second quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health.
Friday, September 30
Australia is to produce official data on private sector credit.
The U.S. is to round up the week with official data on personal spending and inflation as well as a report on manufacturing activity in the Chicago area. Meanwhile, the University of Michigan is to publish revised data on consumer sentiment and inflation expectations.