AUD/USD hit 0.9710 on Friday, the pair’s lowest since June 5; the pair subsequently consolidated at 0.9726 by close of trade on Friday, down 2.95% for the week.
The pair is likely to find support at 0.9672, the low from May 31, 2012 and resistance at 0.9829, Friday’s session high.
The dollar was boosted amid growing expectations the Fed will wind down its stimulus program, amid indications of an improving U.S. economic outlook.
The University of Michigan said its consumer sentiment index jumped to 83.7 in May, its highest level since 2007, from 76.4 in the preceding month, outstripping expectations for a reading of 78.0.
A separate report by the Conference Board showed that its index of leading economic indicators rose 0.6% in April, more than double the 0.2% increase expected by economists.
The data came after a series of economic data releases on Thursday raised doubts over the strength of the U.S. economic recovery.
Official data showed that consumer price inflation and housing starts fell more-than-expected in April, while jobless claims posted the largest increase in six months.
Meanwhile, the Aussie continued to come under pressure amid concerns over a deteriorating domestic economic outlook.
Australian Treasurer Wayne Swan said earlier this week he believes the Australian economy will grow 2.75% over the next 12 months, a forecast that is below the 3% most market participants have become accustomed to.
In the week ahead, traders will be focusing on Wednesday’s Federal Reserve minutes, as well as testimony on the economic outlook and monetary policy by Fed Chairman Ben Bernanke.
Markets will also be awaiting the release of the minutes of the Reserve Bank of Australia’s most recent policy-setting meeting.
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 for the day.
Tuesday, May 21
The Reserve Bank of Australia is to release the minutes of its most recent policy setting meeting, which contain important insights into economic conditions from the bank’s perspective.
Australia is also to publish an index of leading economic indicators.
Wednesday, May 22
Australia is to release private sector data on consumer sentiment, a leading economic indicator.
The U.S. is to release data on existing home sales, a leading indicator of economic health, while the Fed is to publish the minutes of its most recent policy-setting meeting.
Meanwhile, Fed Chairman Ben Bernanke is to testify on the economy and monetary policy in Washington.
Thursday, May 23
The U.S. is to release the weekly government report on initial jobless claims and official data on new home sales, a leading indicator of economic health.
Friday, May 24
The U.S. is to round up the week with government data on durable goods orders, a leading indicator of production.