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Forex - AUD/USD weekly outlook: August 18 - 22

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Investing.com -

Investing.com - The Australian dollar rose to a more than one-week high against its U.S. counterpart on Friday, following the release of a mixed bag of U.S. economic data.

AUD/USD hit a daily high of 0.9333 on Friday, the pair's strongest level since August 7, before subsequently consolidating at 0.9320 by close of trade, up 0.02% for the day and 0.46% higher for the week.

The pair is likely to find support at 0.9283, the low from August 14 and resistance at 0.9356, the high from August 7.

The preliminary Thomson Reuters/University of Michigan consumer sentiment index ticked down to a nine-month low of 79.2 in August from 81.8 in July. Analysts had expected the index to rise to 82.5 this month.

Meanwhile, the New York Federal Reserve said that its Empire State manufacturing index fell to a four-month low of 14.69 this month, from a reading of 25.60 in July, worse than expectations for a decline to 20.0.

Also Friday, the Federal Reserve said U.S. industrial production rose 0.4% in July, beating expectations for a 0.3% gain.

A separate report showed that U.S. producer price inflation rose 0.1% on year last month, in line with expectations. Core producer price inflation, which excludes food, energy and trade, rose 0.2% in July, also in line with market projections.

The disappointing data prompted traders to trim bets the Federal Reserve will begin raising rates in the first half of next year.

Meanwhile, fears that the conflict between Ukraine and Russia will escalate mounted on Friday after Ukraine said its forces had attacked and partly destroyed a Russian armored convoy that entered Ukrainian territory overnight.

Separately, NATO's secretary-general said the organization observed a Russian "incursion" into Ukraine on Thursday night, which was denied by Moscow.

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 12.

Net longs totaled 29,546 contracts, down from net longs of 33,300 in the preceding week.

In the week ahead, investors will be anticipating an annual meeting of top central bank officials and economists in Jackson Hole, Wyoming from August 21 to 23.

The spotlight will be on Fed Chair Janet Yellen, who will speak on Friday in her first appearance at Jackson Hole as head of the U.S. central bank.

Market watchers will also pay close attention to the minutes of the Fed's July policy meeting due to be published on Wednesday for further clues about the timing of future interest rate hikes.

The Reserve Bank of Australia is also to publish meeting minutes on Tuesday.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, August 18

The U.S. is to produce private sector data on the housing market.

Tuesday, August 19

The RBA is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank's perspective.

The U.S. is to release reports on building permits, housing starts and consumer inflation.

Wednesday, August 20

RBA Governor Glenn Stevens is to speak, his comments will be closely watched.

Later Wednesday, the Federal Reserve is to publish the minutes of its latest policy meeting.

Thursday, August 21

China is to release the preliminary reading of the HSBC manufacturing index. The Asian nation is Australia's largest trade partner.

The U.S. is to produce data on unemployment claims, manufacturing activity and existing home sales.

The first day of the annual economic symposium is due to take place in Jackson Hole, Wyoming.

Friday, August 22

Fed Chair Janet Yellen and ECB President Mario Draghi are both to speak at the second day of the annual economic symposium in Jackson Hole, Wyoming.

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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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