Investing.com - The Australian dollar ended Friday’s session close to a four-month high, amid indications the local economy is picking up, while hopes for fresh stimulus measures from China also supported gains.
AUD/USD rose to 0.9295 on Friday, the pair’s highest since November 21, before subsequently consolidating at 0.9248 by close of trade on Friday, down 0.1% for the day but still 1.79% higher for the week.
The pair is likely to find support at 0.9215, the low from March 27 and resistance at 0.9295, the high from March 28.
The Aussie climbed to the highest level since November on Friday after China's premier Li Keqiang said policymakers are prepared to do more to shore up the cooling economy.
The remarks helped ease concerns over recent signs of a slowdown in the world’s second-largest economy. The Asian nation is also Australia’s biggest trade partner.
The Australian dollar remained supported after upbeat comments made by Reserve Bank of Australia Governor Glenn Stevens earlier in the week.
RBA Governor Stevens said on Wednesday that the nation’s economy may strengthen later this year. Stevens added that this was helped by "the lower exchange rate since last April and the improved economic conditions overseas."
Meanwhile, in the U.S., data on Friday showed that U.S. consumer spending rose 0.3% last month after a downwardly revised gain of 0.2% in January
A separate report showed that the University of Michigan’s consumer sentiment index slipped to 80.0 in March, down from 81.6 the month before. It was higher than the preliminary March reading of 79.9 but below forecasts of 80.5.
On Thursday, economic reports showed that U.S. jobless claims fell to their lowest level since late November last week, while U.S. fourth quarter growth was revised higher.
Data from the Commodities Futures Trading Commission released Friday showed that speculators reduced their bearish bets on the Australian dollar for the second consecutive week in the week ending March 25.
Net shorts totaled 20,527 contracts, compared to net shorts of 24,463 in the preceding week.
In the week ahead, investors will be looking to Friday’s U.S. nonfarm payrolls report for March for further indications on the strength of the labor market, while Tuesday’s rate decision from the RBA will also be closely-watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 31
Australia is to publish data on private sector credit.
Tuesday, April 1
China is to release data on manufacturing activity.
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Later Tuesday, the Institute of Supply Management is to publish a report on U.S. manufacturing growth.
Wednesday, April 2
Australia is to produce data on building approvals, a leading indicator of future construction activity.
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.
Thursday, April 3
Australia is to release data on retail sales and the trade balance, the difference in value between imports and exports.
China is to produce data on service sector activity.
Later in the day, the U.S. is to publish data on the trade balance and the weekly report on initial jobless claims. Meanwhile, the ISM is to publish a report service sector activity.
Friday, April 4
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.