Forex - AUD/USD weekly outlook: February 23 - 27

Investing.com - The Australian dollar rose to a two-week high against its U.S. counterpart on Friday, as appetite for riskier assets was boosted after euro zone finance ministers agreed on a deal to extend Greece’s €240 billion bailout by four months.

Athens has until Monday to present a list of reforms to be approved by the country’s creditors in order to secure the extension, which will give it more time to reach a lasting agreement with its creditors.

Greece faces the risk of default and exit from the single currency region if the country does not obtain an extension beyond the February 28 deadline.

AUD/USD hit a session high of 0.7849 on Friday, the pair's highest since February 6, before subsequently consolidating at 0.7842 by close of trade, up 0.65% for the day and 0.95% higher for the week.

The greenback remained under pressure after the minutes of the Federal Reserve’s January meeting released earlier in the week showed that some officials thought that raising rates too soon could weigh on the U.S. economic recovery.

The dovish minutes prompted investors to push back expectations for the first U.S. rate hike to at least the second half of this year.

Meanwhile, in the minutes of the Reserve Bank of Australia's February policy meeting published earlier in the week, the central bank said it cut rates due to the deteriorating economic outlook.

The RBA surprised markets earlier in the month when it lowered its benchmark interest rate to a new record-low 2.25% from 2.50%.

In the coming week, Tuesday’s testimony by Fed Chair Janet Yellen to the Senate Banking Committee will be closely watched for any indication on when U.S. interest rates may start to rise.

Traders will also be watching Monday’s deadline on Greece's financial rescue package.

Investing.com has compiled a list of these and other significant events likely to affect the markets in the week ahead.

Monday, February 23

Markets in China are to remain closed for a national holiday.

The U.S. is to publish a report on existing home sales.

Tuesday, February 24

Markets in China are to remain closed for a national holiday.

The U.S. is to produce a private sector report on consumer confidence. Meanwhile, Fed Chair Janet Yellen is to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington.

Wednesday, February 25

Australia is to publish a report on the wage price index.

China is to release the preliminary reading of the HSBC manufacturing index.

The U.S. is to release data on new home sales.

Thursday, February 26

Australia is to publish a report on private capital expenditure.

The U.S. is also to release data on initial jobless claims, consumer price inflation and durable goods orders.

Friday, February 27

The U.S. is to round up the week with revised data on fourth quarter growth, as well as reports on pending home sales, business activity in the Chicago region and consumer sentiment.