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Forex - AUD/USD weekly outlook: July 8 - 12

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Shutterstock photo - The Australian dollar fell sharply against its U.S. counterpart on Friday to reapproach the lowest level since September 2010, as stronger-than-forecast U.S. jobs boosted expectations that the Federal Reserve will start to unwind its bond purchasing program this year.

AUD/USD hit 0.9034 on Wednesday, the pair's lowest since September 1, 2010; the pair subsequently consolidated at 0.9054 by close of trade on Friday, down 0.91% on the day and 0.95% lower for the week.

The pair is likely to find near-term support at 0.9034, Wednesday's low and a 34-month low and resistance at 0.9179, Friday's session high.

The Department of Labor said the U.S. economy added 195,000 jobs in June, more than the 165,000 increase forecast by economists. May's figure was revised up to 195,000 from a previously reported 175,000. The unemployment rate remained unchanged at 7.6% in June.

Fed Chairman Ben Bernanke said last month the bank could begin tapering its USD85 billion-a-month asset purchase program by the end of 2013 and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.

The greenback was also boosted by expectations that other world central banks will continue to maintain loose monetary policy.

On Thursday the European Central Bank and the Bank of England indicated that interest rates will remain low for an extended period to help spur growth, while the weakening trend of the yen looked likely to remain intact after the Bank of Japan unveiled a massive monetary easing program in April.

Meanwhile, in Australia, the Reserve Bank of Australia left its benchmark interest rate at a record low 2.75% earlier in the week, but suggested further rate cuts may come later this year, saying the subdued inflation outlook left scope for more easing.

Commenting on the decision, RBA Governor Glenn Stevens said the Aussie "remains at a high level" and may "depreciate further over time, which would help to foster a rebalancing of growth."

In the week ahead, investors will be looking ahead to Wednesday's minutes of the Federal Reserve's June meeting, as well as Friday's closely watched data on U.S. consumer sentiment.

Ahead of the coming week, 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, July 9

Australia is to publish a report on business confidence.

Meanwhile, China is to produce official data on consumer price inflation, which accounts for the majority of overall inflation. The Asian nation is Australia's largest trade partner.

Wednesday, July 10

Australia is to publish a report on consumer sentiment, a leading indicator of consumer spending.

Later Wednesday, the Federal Reserve is to publish the minutes of its latest policy setting meeting. Meanwhile, Fed Chairman Ben Bernanke is to speak.

Thursday, July 11

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, July 12

Australia is to publish official data on home loans, a leading indicator of demand in the housing sector.

The U.S. is to round up the week with official data on producer price inflation and preliminary data from the University of Michigan on consumer sentiment. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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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