Investing.com - The Australian dollar ended the week at a more than five-year low against its U.S. counterpart on Friday, as ongoing expectations for an interest rate hike in the U.S. boosted demand for the greenback.
AUD/USD hit 0.7260 on Friday, the pair's lowest since May 2009, before subsequently consolidating at 0.7280 by close of trade, down 1.02% for the day.
For the week, the pair lost 1.22%, the fifth consecutive weekly decline, amid speculation the Federal Reserve will raise interest rates for the first time in nine years as early as September.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.34 late Friday, paring the week’s losses to 0.65%.
The dollar has been boosted by expectations that the U.S. central bank could raise rates as soon as September if the economy continues to improve as expected.
The Aussie was also pressured by private sector data showing that manufacturing activity in China slowed to a 15-month low in July.
The preliminary reading of the Caixin/Markit manufacturing purchasing managers’ index published Friday fell to 48.2 from a final reading of 49.4 in June. It was the lowest reading since April 2014.
The weak data indicated that growth in China remains sluggish. The Asian nation is Australia's largest trade partner.
In the week ahead, market players will focus on the outcome of the Federal Reserve's highly-anticipated policy meeting on Wednesday as well as the release of preliminary second quarter growth data on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, July 27
The U.S. is to release data on durable goods orders.
Tuesday, July 28
The U.S. is to release a report on consumer confidence.
Wednesday, July 29
The U.S. is to report on pending home sales. Later in the day, the Federal Reserve is to announce its latest monetary policy decision and publish its rate statement.
Thursday, July 30
Reserve Bank of Australia Governor Glenn Stevens is to speak at an event in Sydney. At the same time, Australia is to report on building approvals and import prices.
The U.S. is to produce preliminary data on second quarter growth and the weekly report on initial jobless claims.
Friday, July 31
Australia is to release data on producer price inflation.
The U.S. is to round up the week with revised data on consumer sentiment and a report on business activity in the Chicago region.