Investing.com - The Australian dollar ended the week lower against its U.S. counterpart on Friday, amid expectations that the Federal Reserve will continue to gradually reduce the pace of its asset purchase program.
AUD/USD fell to 0.8935 on Thursday, the pair’s lowest since February 13, before subsequently consolidating at 0.8978 by close of trade on Friday, down 0.31% for the day and 0.63% lower for the week.
The pair is likely to find support at 0.8926, the low from February 13 and resistance at 0.9079, the high from February 18.
Data on Friday showed that U.S. existing home sales fell by a larger-than-forecast 5.1% in January to hit an 18-month low.
However, investors continued to look past a recent series of disappointing U.S. economic reports, attributing them to severely cold winter weather.
Wednesday’s minutes of the Federal Reserve’s January meeting showed that officials agreed the current pace of reductions to the bank’s asset purchase program would remain unchanged, so long as the economy shows signs of improvement.
Official also discussed when to begin raising interest rates, the minutes said.
The U.S. central bank is currently purchasing $65 billion of assets per month.
Dallas Fed President Richard Fisher said Friday that the central bank should continue to taper its asset-purchase program. Separately, St. Louis Fed President James Bullard said the U.S. economy is headed for a good year of growth and he expects the Fed to continue rolling back its stimulus program.
Meanwhile, in Australia, minutes of the Reserve Bank of Australia’s most-recent policy meeting published on Tuesday said a period of steady interest rates is most likely as record-low borrowing costs and a weaker currency support growth.
On February 4, the RBA kept the benchmark rate unchanged at 2.5%.
Data from the Commodities Futures Trading Commission released Friday showed that speculators reduced their bearish bets on the Australian dollar in the week ending February 18.
Net shorts totaled 44,398 contracts, down 6.4% from the previous week’s total of 47,403 net shorts.
In the week ahead, market players will continue to pay close attention to U.S. economic data releases for further indications on the strength of the economy and the future course of monetary policy.
The U.S. is to publish revised data on fourth quarter economic growth, while data on durable goods orders and consumer confidence will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.
Tuesday, February 25
The U.S. is to release data on consumer confidence and a private sector report on house price inflation.
Wednesday, February 26
Australia is to publish data on completed construction work.
The U.S. is to release data on new home sales, a leading indicator of demand in the housing market.
Thursday, February 27
Australia is to release data on private capital expenditure.
The U.S. is to release data on durable goods orders, a leading indicator of production, and the weekly report on initial jobless claims.
Friday, February 28
Australia is to produce a report on private sector credit.
The U.S. is to round up the week with revised data on fourth quarter growth, a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and private sector data on pending home sales.