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Forex - AUD/USD weekly outlook: August 29 - September 2

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Forexpros - Last week saw the Australian dollar rally to a seven-day high against its U.S. counterpart on Friday, after Federal Reserve Chairman Ben Bernanke said the central bank remained prepared to provide more support to a weak U.S. economy, while comments from Reserve Bank of Australia Governor Glenn Stevens also lent support.

AUD/USD hit 1.0591 on Friday, the highest since August 17; the pair subsequently consolidated at 1.0569 by close of trade, jumping 1.78%, the second consecutive weekly gain.

The pair was likely to find support at 1.0385, the low of August 23 and resistance at 1.0778, the high of August 4.

Speaking Friday at the Federal Reserve's annual retreat in Jackson Hole, Wyoming, Fed Chairman Ben Bernanke said the central bank was prepared to implement fresh measures to stimulate U.S. growth, but stopped short of outlining when and if this may happen.

"The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery," Bernanke said.

Bernanke announced that the central bank's September policy-setting meeting would run for two days instead of one, in order to "allow a fuller discussion" of the economic outlook.

Also Friday, the Commerce Department said that the U.S. economy grew 1% in the second quarter, disappointing expectations for an expansion of 1.1% and slower than an initial estimate of 1.3%.

The Aussie was also supported after RBA Governor Glenn Stevens told a parliamentary committee on Friday that inflation "bears careful watching", while adding that the central bank has "sufficient ammunition to keep it under control."

The comments sparked speculation that the RBA could raise rates to curb rising consumer prices. At present, benchmark interest rates are 4.75% in Australia, compared with zero in the U.S., attracting investors to the nation's higher-yielding currency.

Looking ahead to the coming week, investors will be focusing on Friday's release of U.S. data on non-farm payrolls in order to gauge the strength of the U.S. economic recovery.

Also next week, the U.S. Institute of Supply Management is to publish its index of manufacturing activity for August, while Australia is to publish official data on retail sales.

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

Monday, August 29

Australia is to release industry data on new home sales, a leading indicator of economic health.

Meanwhile, the U.S. is to produce industry data on pending home sales, a leading indicator of health in the housing market. The nation is also to release official data on personal income and expenditure and consumer prices.

Tuesday, August 30

Australia is to release government data on building approvals, an excellent gauge of future construction activity.

Later in the day, the U.S. is to release data on consumer confidence, a leading indicator of consumer spending, as well as an industry report on house price inflation. In addition, the Federal Reserve's Open Market Committee is to publish the minutes of its most recent policy setting meeting.

Wednesday, August 31

Australia is to produce government data on private sector credit.

In the U.S., payroll processing firm ADP is to release a report on non-farm payrolls, which leads government data by two days. The U.S. is also to publish data on manufacturing activity in the Chicago area, factory orders and crude oil stockpiles.

Thursday, September 1

Australia is to publish official data on private capital expenditure, as well as government data on retail sales and commodity prices, which make up approximately half of the country's export revenue.

Later in the day, the U.S. is to publish its closely watched weekly report on initial jobless claims, while the ISM is to produce data on manufacturing sector growth.

Friday, September 2

The U.S. is to round up the week with a government report on private sector job creation, a key indicator of overall economic health. The country is also to publish official data on the unemployment rate and average hourly earnings, an important inflationary indicator.

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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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