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Forex - AUD/USD weekly outlook: Oct. 28 - Nov. 1

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Shutterstock photo - " The Australian dollar ended Friday's session at a one-week low against its U.S. counterpart, as demand for the Aussie weakened amid growing concerns over tightening liquidity conditions in the Chinese banking sector.

AUD/USD hit 0.9572 on Friday, the pair's lowest since October 17; the pair subsequently consolidated at 0.9584 by close of trade on Friday, down 0.39% on the day and 0.95% lower for the week.

The pair is likely to find support at 0.9528, the low from October 17 and resistance at 0.9671, the high from October 24.

Risk appetite weakened after Chinese interbank lending rates surged to the highest level since June on Thursday, renewing fears over a cash crunch in the country's financial system

Concerns over tightening liquidity conditions overshadowed stronger-than-expected Chinese manufacturing data.

Data released on Thursday showed that China's HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.

The Asian nation is Australia's largest trade partner.

Elsewhere, in Australia, official data released earlier in the week showed that consumer price inflation rose by 1.2% in the third quarter, exceeding expectations for a 0.8% increase, after a 0.4% rise in the three months to June.

Trimmed mean consumer price inflation, which excludes the most volatile 30% of items, rose 0.7% in the September quarter, more than the expected 0.6% uptick, after an upwardly revised 0.6% increase in the second quarter.

Meanwhile, in the U.S., data on Friday showed that core durable goods orders unexpectedly fell 0.1% in September, the third consecutively decline.

A separate report showed that the University of Michigan U.S. consumer sentiment index was revised down to a 10-month low in October.

The disappointing data underlined expectations that the Federal Reserve will delay tapering its stimulus program until next year amid concerns over the impact of the 16-day U.S. government shutdown on the economic recovery.

In the week ahead, investors will be focused on the outcome of Wednesday's Fed policy setting meeting. The central bank is expected to keep its USD85 billion-a-month asset purchase program on track.

U.S. data releases will also be in focus in the week ahead, with reports on retail sales, inflation figures, pending home sales and private-sector jobs growth all on tap.

Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

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

Monday, October 28

The U.S. is to produce reports on industrial production and the capacity utilization rate, as well as private sector data on pending home sales.

Tuesday, October 29

The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish data on producer price inflation and a report on consumer confidence, a leading economic indicator.

Wednesday, October 30

The U.S. is to release the ADP report on nonfarm payrolls and official data on consumer price inflation.

Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke.

Thursday, October 31

Australia is to release a series of data, including reports on building approvals, import prices and private sector credit.

The U.S. is to release data on initial jobless claims and a report on manufacturing activity in the Chicago region.

Friday, November 1

Australia is to publish data on producer price inflation, a leading indicator of consumer prices.

China is to produce official data on manufacturing activity, a leading indicator of economic health. Beijing is also to release the revised reading of the HSBC manufacturing index.

The U.S. is to round up the week with a report from the Institute of Supply Management on manufacturing activity. offers an extensive set of professional tools for the financial markets.

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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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