Investing.com - The Australian dollar ended Friday’s session at a three-week high against its U.S. counterpart, after weaker-than-forecast U.S. jobs data dampened expectations that the Federal Reserve will start to taper its stimulus program later this month.
AUD/USD hit 0.9217 on Friday, the pair’s highest level since August 19; the pair subsequently consolidated at 0.9190 by close of trade on Friday, up 0.75% on the day and 3.11% higher for the week.
The pair is likely to find support at 0.9115, Friday’s session low and resistance at 0.9232, the high from August 19.
The Department of Labor said Friday the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The weak data fuelled speculation that the Fed is now less likely to start reducing its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
Meanwhile, in Australia, the Reserve Bank of Australia left interest rates unchanged earlier in the week and refrained from speaking about possible rate cuts in the future.
At the end of its monthly policy-setting meeting on Tuesday, the RBA held interest rates at a record-low 2.5%, in line with expectations.
Commenting on the decision, RBA Governor Glenn Stevens said the bank "will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target."
Data released on Wednesday showed that Australia's gross domestic product expanded by 0.6% in the second quarter, in line with expectations, following a downwardly revised 0.5% expansion in the three months to March.
Separate reports showed that the Pacific nation’s trade balance swung to a deficit of AUD770 million last month from a surplus of AUD240 million in July, while retail sales rose 0.1% in July, below expectations for a 0.4% increase, after a flat reading the previous month.
In the week ahead, investors will be closely watching Friday’s U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.
Key Australian employment data will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 9
Australia is to release data on job advertisements and home loans.
Meanwhile, China is to produce data on consumer price inflation, which accounts for the majority of overall inflation. The Asian nation is Australia’s largest trade partner.
Tuesday, September 10
Australia is to release private sector data on inflation expectations and business confidence.
China is to publish data on fixed asset investments and industrial production.
Wednesday, September 11
Australia is to produce private sector data on consumer sentiment.
Thursday, September 12
Australia is to produce official data on the change in the number of people unemployed and the unemployment rate.
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.
AUD/USD hit 0.9217 on Friday, the pair’s highest level since August 19; the pair subsequently consolidated at 0.9190 by close of trade on Friday, up 0.75% on the day and 3.11% higher for the week.
The pair is likely to find support at 0.9115, Friday’s session low and resistance at 0.9232, the high from August 19.
The Department of Labor said Friday the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The weak data fuelled speculation that the Fed is now less likely to start reducing its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
Meanwhile, in Australia, the Reserve Bank of Australia left interest rates unchanged earlier in the week and refrained from speaking about possible rate cuts in the future.
At the end of its monthly policy-setting meeting on Tuesday, the RBA held interest rates at a record-low 2.5%, in line with expectations.
Commenting on the decision, RBA Governor Glenn Stevens said the bank "will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target."
Data released on Wednesday showed that Australia's gross domestic product expanded by 0.6% in the second quarter, in line with expectations, following a downwardly revised 0.5% expansion in the three months to March.
Separate reports showed that the Pacific nation’s trade balance swung to a deficit of AUD770 million last month from a surplus of AUD240 million in July, while retail sales rose 0.1% in July, below expectations for a 0.4% increase, after a flat reading the previous month.
In the week ahead, investors will be closely watching Friday’s U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.
Key Australian employment data will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 9
Australia is to release data on job advertisements and home loans.
Meanwhile, China is to produce data on consumer price inflation, which accounts for the majority of overall inflation. The Asian nation is Australia’s largest trade partner.
Tuesday, September 10
Australia is to release private sector data on inflation expectations and business confidence.
China is to publish data on fixed asset investments and industrial production.
Wednesday, September 11
Australia is to produce private sector data on consumer sentiment.
Thursday, September 12
Australia is to produce official data on the change in the number of people unemployed and the unemployment rate.
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.