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Forex - AUD/USD weekly outlook: March 14-18

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Forex Pros - Last week saw the Australian dollar rebound from a two-week low against its U.S. counterpart on Friday, after a flurry of upbeat Chinese data eased concerns over a slowdown in Asia's largest economy.

AUD/USD hit 0.9968 on Friday, the pair's lowest since February 22; the pair subsequently consolidated at 1.0135 by close of trade, dipping 0.1% over the week.

The pair was likely to find support at 0.9968, Friday's low and resistance at 1.0184, the high of March 7.

The Aussie slumped to its lowest level in two weeks, following the magnitude 8.9 earthquake that struck Japan's north coast, but then erased losses after China's National Bureau of Statistics released a flurry of upbeat data.

Chinese consumer prices rose 4.9% in February from a year earlier, broadly in line with expectations. Industrial output expanded 14.9% in February from a year ago, retail sales climbed 11.6%, and investment in fixed assets increased 24.9% in the first two months of 2011 from a year earlier, the data also showed. China is Australia's largest trading partner.

The Aussie turned sharply lower against the U.S. dollar on Thursday after official data showed that Australia's economy lost jobs in February for the first time in 18 months. The Statistics Bureau said overall employment fell 10,100 in February, compared to expectations of an increase of 20,000.

Also Thursday, government data showed that China unexpectedly posted it's largest trade deficit in seven years, as the Lunar New Year holiday disrupted export activity.

In the week ahead, the main market focus looks set to be on the Federal Reserve's policy setting meeting on Tuesday. Also next week, Australia is to publish the minutes of its most recent monetary policy meeting.

Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday, as there are no relevant events on this day.

Monday, March 14

Reserve Bank of Australia assistant governor Guy Debelle is to speak at a public engagement. He's responsible for advising Reserve Bank Board members n matters relating to the financial markets, and his public engagements are often used to drop subtle clues regarding future policy shifts.

Tuesday, March 15

The Reserve Bank of Australia is to publish the minutes of its most recent policy setting meeting. The minutes give markets an in-depth insight into the economic conditions that influenced the decision on where to set interest rates. The country is also to publish official data on new motor vehicle sales, a sign of consumer confidence as well as an index of economic indicators, designed to predict the future direction of the economy.

Meanwhile, the U.S. is to publish official data on manufacturing activity in New York state, as well as government reports on import prices and the balance of domestic and foreign investment.

In addition, the Federal Reserve is to hold its policy setting meeting before announcing its federal funds rate. The bank's rate statement will be closely watched as it discusses the economic outlook and offers clues on the outcome of future votes.

Wednesday, March 16

Australia is to publish official data on housing starts, a important indicator of economic health.

Later in the day, the U.S. is to publish a flurry of government data, with reports on building permits, an excellent gauge of future construction activity, as well as data on producer price inflation, housing starts and crude oil stockpiles.

Thursday, March 17

The RBA is to publish its quarterly bulletin, which provides a detailed analysis of current and future economic conditions from the bank's point of view.

The U.S. is to publish official data on initial jobless claims, the nation's earliest employment data. The country is also to publish government data on consumer price inflation, industrial production and the capacity utilization rate. Meanwhile, the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity, a leading indicator of economic health.

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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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