The Australian dollar was lower against the U.S. dollar on Friday, trimming some of the week’s gains ahead of a string of Chinese economic data due for release in the coming week amid concerns over the outlook for growth in Asia.
AUD/USD hit 1.0292 on Thursday, the pair’s highest since October 2; the pair subsequently consolidated at 1.0230 by close of trade on Friday, still up 0.74% for the week.
The pair was likely to find support at 1.0174, the low of October 9 and resistance at 1.0292, Thursday’s high.
The International Monetary Fund has forecast Asian economic growth of 5.9% in 2013, but this week said it sees a one in seven chance of it being less than 4%.
The IMF also cut its forecast for global economic growth this year to 3.3% from 3.5% and warned that a failure by European and U.S. policymakers to tackle current problems could threaten what it called a “slow and bumpy” economic recovery.
On Tuesday, China moved to inject liquidity into markets, fuelling speculation that Beijing may announce more stimulus measures. China is the world’s second largest economy and Australia’s largest trading partner.
The Australian dollar rose to a more than one-week high against the U.S. dollar on Thursday after official data showed that the Australian economy added 14,500 jobs in September, easily beating expectations for an increase of 3,800.
The country’s unemployment rate ticked up to 5.4% in September, against expectations for an increase to 5.3%, from 5.1% in August.
In the U.S., the Department of Labor said the number of individuals filing for initial jobless benefits fell by 30,000 to a seasonally adjusted 339,000, compared to expectations for an increase of 1,000.
However, as the figures were released a spokesman for the Labor Department said one large state had not reported additional quarterly figures, accounting for a significant part of the steep decline in claims.
On Friday, data showed that U.S. consumer sentiment rose to its highest level in five years in October, while a separate report showed that producer price inflation rose more-than-forecast in September.
The University of Michigan said that its consumer sentiment index rose to a seasonally adjusted 83.1 from 78.3 in September, the highest level since September 2007.
In the week ahead, markets will continue to continue to focus on whether Spain will formally request a bailout and if international creditors will extend loans to Greece as the country struggles to meet deficit reduction targets.
Meanwhile, the U.S. is to release a flurry of data, including reports on retail sales, manufacturing activity in New York and Philadelphia, initial jobless claims and housing starts, among others.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, October 15
Australia is to produce official data on home loans, a leading indicator of the health of the housing sector. The country is also to publish government data on new vehicle sales, a leading indicator of consumer sentiment.
The U.S. is to produce official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity. In addition, the U.S. is to release data on manufacturing activity in New York state, as well as official data on business inventories.
Tuesday, October 16
The Reserve Bank of Australia is to publish the minutes of its most recent policy meeting. The minutes contain important insights into current and future economic conditions from the bank’s perspective.
The U.S. is to release government data on consumer price inflation and industrial production. The U.S. is also to produce official data on treasury long-term purchases and the capacity utilization rate.
Wednesday, October 17
Australia is to publish an index of leading economic indicators, designed to predict the future direction of the economy.
Later Wednesday, the U.S. is to publish government data on building permits, an excellent gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health. The U.S. is also to produce official data on crude oil stockpiles.
Thursday, October 18
Australia is to publish a report on business confidence, an important indicator of economic health.
The U.S. is to publish weekly government data on initial jobless claims, as well as a report on manufacturing activity in Philadelphia, a leading indicator of economic strength.
Friday, October 19
The U.S. is to round up the week with industry data on existing home sales, a leading indicator of economic health.
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