Forex - AUD/USD weekly outlook: 03-07 October 2011

Forex News - The Australian dollar ended the week sharply lower against its U.S. counterpart on Friday, as ongoing concerns over European leaders' ability to tackle the euro zone debt crisis weakened demand for riskier assets.

AUD/USD hit 0.9621 on Monday, the pair's lowest since December 1; the pair subsequently consolidated at 0.9659 by close of trade on Friday, dropping 1.52% over the week.

The pair is likely to find support at 0.9535, the low of December 1 and resistance at 0.9954, the high of September 28.

The Aussie closed at an almost ten-month low against the greenback on Friday, as risk appetite weakened after an unexpected rise in euro zone inflation for September dampened hopes that the European Central Bank will cut interest rates in an attempt to boost the region's economy.

Elsewhere, private sector data showed that China's manufacturing sector contracted for the third consecutive month in September, adding to concerns over the global outlook.

Elsewhere Friday, the Reserve Bank of Australia said that private sector credit rose in line with expectations in August, inching up 0.2% after a 0.3% increase the previous month.

In the U.S., revised data on Thursday showed that the U.S. economy grew more than previously estimated in the second quarter. In its final estimate for the quarter, the Commerce Department said gross domestic product grew at annual rate of 1.3%, up from the previously estimated 1.0%.

Another report on Friday showed that consumer spending in the U.S. rose 0.2% in August after a revised 0.7% increase the previous month.

In the coming week, markets will be closely watching the outcome of Thursday’s policy-setting meeting by the ECB as well as developments in Greece. Meanwhile, Friday’s data on U.S. non-farm payrolls will also be a major focus for the week, as well as a string of Australian data on building approvals, trade balance and commodity prices

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

Monday, October 3

Markets in Australia will remain closed for a bank holiday.

The U.S. Institute of Supply Management is to publish data on manufacturing activity.

Tuesday, October 4

Australia is to produce a string of data, with reports on building approvals, an excellent gauge of future construction activity, the trade balance and commodity prices. In addition, the Reserve Bank of Australia is to announce its benchmark interest rate. The bank’s rate statement will be closely watched as it offers traders an insight into current and future economic conditions from the bank’s point of view.

Later Tuesday, the U.S. is to release official data on factory orders, a leading indicator of production, while Federal Reserve Chairman Ben Bernanke is to speak in Washington.

Wednesday, October 5

Australia is to publish official data on retail sales, as well as industry data on service sector growth, an important indicator of economic health.

Later in the day, the U.S. is to release a report on non-farm payrolls, compiled by payroll processing firm ADP, which leads government data by two days. Meanwhile, the ISM is to produce a report on service sector activity, a leading indicator of economic health. The country is also to release government data on crude oil inventories.

Thursday, October 6

The U.S. is to release its weekly report on initial jobless claims.

Friday, October 7

The U.S. is to round up the week with the monthly report on non-farm payrolls, which is a leading indicator of job creation. The country is also to publish official data on the unemployment rate and average hourly earnings.