We have updated our privacy policy and terms & conditions. Find out more here.
3
 

Forex - AUD/USD weekly outlook: December 31 - January 4

By Investing.com  |  Forex  |  Dec 30, 2012 12:05PM GMT  |   Add a Comment
 
AA
+
-
Investing.com - The Australian dollar ended Friday’s session close to a five-week low against its U.S. counterpart, as investors became increasingly worried that U.S. lawmakers will not reach a deal to tackle the approaching fiscal cliff crisis ahead of the January 1 deadline.

Forex - AUD/USD weekly outlook: December 31 - January 4
AUD/USD hit 1.0343 on Wednesday, the pair’s lowest since November 21; the pair subsequently consolidated at 1.0369 by close of trade, down 0.28% for the week.

The pair is likely to find support at 1.0343, Wednesday’s low and a five-week low and resistance at 1.0395, Friday’s high.

Market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1 unless Democrats and Republicans agree how to cut the deficit.

U.S. President Barack Obama met with congressional leaders at the White House Friday afternoon, but both sides failed to reach an agreement ahead of the looming year-end deadline.

The gathering included House Speaker John Boehner and Senate Minority Leader Mitch McConnell, both Republicans, as well as Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats.

The House of Representatives is due to return to Washington on Sunday. The Senate will be in Sunday as well to try to reach a last-ditch agreement.

Without a deal, the U.S. could fall back into recession and drag much of the world down with it.

Adding to the cautious trade environment, Italy saw borrowing costs edge higher at an auction of five- and- ten-year government bonds, amid uncertainty ahead of national elections in February.

Rome sold EUR3 billion of 10-year bonds at an average yield of 4.48%, up from 4.45% last month. The country also auctioned EUR2.87 billion of five-year debt at a yield of 3.26%, compared to 3.23% a month earlier.

Meanwhile, revised data showed that France’s economy grew by a meager 0.1% in the third quarter, down from an initial estimate for growth of 0.2%. The euro zone’s second largest economy shrank 0.1% in the second quarter, unchanged from the previous estimate.

The news prompted investors to shun riskier assets, like stocks and high yielding currencies, and move in to safe-haven assets, such as the U.S. dollar and Treasurys.

In the week ahead trading volumes are expected to remain light, with many investors away for the New Year’s holiday.

Meanwhile, investors will be looking ahead to Friday’s highly anticipated data on U.S. nonfarm payrolls, as investors attempt to gauge the strength of the country’s economic recovery.

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

Monday, December 31

Markets in Australia will remain closed for New Year’s Eve.   

Tuesday, January 1

Markets in the U.S. and Australia  will remain shut in observance of New Year’s Day.

Wednesday, January 2

The Institute of Supply Management is to produce a report on manufacturing growth in the U.S., a leading indicator of economic health.

Thursday, January 3

The U.S. is to release a report on ADP nonfarm payrolls, as well as its weekly government report on initial jobless claims. In addition, the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.

Friday, January 4

Australia is to release data on service sector growth.

Meanwhile, the U.S. is to round up the week with official data on nonfarm payrolls, the foremost gauge of job creation, as well as data on the overall unemployment rate.

The country is also to release official data on factory orders, crude oil stockpiles and natural gas inventories. In addition, the ISM is to produce a report on service sector activity.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Add a Comment

 

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

AUD/USD
 
 
 
Are you sure you want to delete this chart?
 
 
 
Are you sure you want to delete this chart?
 
 
 

Successfully Reported

Thank you. This comment has been flagged for a moderator.
_touchLoadingMsg