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Forex - AUD/USD weekly outlook: August 11 - 15

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Investing.com -

Investing.com - The Australian dollar bounced off a nine-week low against its U.S. counterpart on Friday, as appetite for riskier assets strengthened after news reports that Russia ended military exercises on the Ukrainian border, easing concerns that an invasion could take place.

AUD/USD hit a daily low of 0.9239 on Friday, the pair's weakest level since June 3, before subsequently consolidating at 0.9277 by close of trade, up 0.03% for the day but still 0.39% lower for the week.

The pair is likely to find support at 0.9228, the low from June 3 and resistance at 0.9356, the high from August 7.

Fears over hostilities between Russia and Ukraine eased on Friday after Russia's defense ministry said it had concluded military exercises it was holding close to the border with Ukraine.

NATO warned earlier in the week that Russia massed around 20,000 combat-ready troops on Ukraine's border in preparation for a possible ground invasion.

Meanwhile, U.S. President Barack Obama authorized air strikes in Iraq to halt a Sunni insurgency there and to protect Iraqi civilians from the uprising as well as U.S. personnel in the country.

The Australian dollar sold off on Thursday after a poor employment report revived expectation that the Reserve Bank of Australia may cut interest rates again from the current record low.

Official data showed that the number of employed people in Australia fell by 300 in July, confounding expectations for an increase of 12,000. June's figure was revised down to a 14,900 gain from a previously estimated 15,900 rise.

The report also showed that Australia's unemployment rate rose to 6.4% last month, from 6.0% in June. Analysts had expected the unemployment rate to remain unchanged in July.

On Tuesday, the RBA left its benchmark interest rate unchanged at a record low 2.50% and reiterated that it expects borrowing costs to remain low for an extended period of time.

Commenting on the decision, RBA Governor Glenn Stevens said "the most prudent course is likely to be a period of stability in interest rates."

Data from the Commodities Futures Trading Commission released Friday showed that speculators decreased their bullish bets on the Australian dollar in the week ending August 5.

Net longs totaled 33,300 contracts, down from net longs of 39,606 in the preceding week.

In the week ahead, investors will continue to monitor geopolitical risk, while a U.S. report on July retail sales will also be in focus for further clues about the strength of the economy and the timing of future interest rate hikes.

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 Monday as there are no relevant events on this day.

Tuesday, August 12

Australia is to release reports on business confidence and house prices.

Wednesday, August 13

Australia is to publish data on consumer sentiment and the wage price index.

China is to release a report on industrial production. The Asian nation is Australia's largest trade partner.

The U.S. is to publish data on retail sales and business inventories.

Thursday, August 14

The U.S. is to release the weekly report on initial jobless claims.

Friday, August 15

The U.S. is to round up the week with reports on manufacturing activity in New York state and industrial output, as well as preliminary data on consumer sentiment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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