Investing.com - The Australian dollar slumped to a six-month low against its U.S. counterpart on Friday, after upbeat U.S. economic data underlined optimism over the strength of the economy and fuelled expectations that the Federal Reserve will begin to raise rates sooner than previously thought.
AUD/USD hit a daily low of 0.9031 on Friday, a level not seen since March 20, before subsequently consolidating at 0.9038 by close of trade, down 0.68% for the day and 3.61% lower for the week.
The pair is likely to find support at 0.8994, the low from March 20 and resistance at 0.9107, the high from September 12.
In a preliminary report, the University of Michigan said its consumer sentiment index rose to a 14-month high of 84.6 this month, from a reading of 82.5 in August.
The data came after a government report showed that U.S. retail sales rose 0.6% last month, in line with expectations.
Speculation that the Fed is growing closer to raising interest rates mounted after a study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.
Meanwhile, in Australia, the Australian Bureau of Statistics said Thursday that the country's economy added 121,000 last month, beating expectations for an increase of 12,000.
The report also showed that Australia's unemployment rate ticked down to 6.1% in August from 6.4% in July, compared to expectations for a decline to 6.3%.
Data from the Commodities Futures Trading Commission released Friday showed that speculators decreased their bullish bets on the Australian dollar in the week ending September 9.
Net longs totaled 41,229 contracts, down from net longs of 49,047 in the preceding week.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Fed policy meeting. Fed Chair Janet Yellen was to hold a press conference following the meeting.
The central bank was expected to cut its asset purchase program by another $10 billion, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
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 Friday as there are no relevant events on this day.
Monday, September 15
The U.S. is to release reports on manufacturing activity in the Empire State and industrial production.
Tuesday, September 16
The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
The U.S. is to produce data on producer price inflation.
Wednesday, September 17
The U.S. is to produce data on consumer prices. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. Fed Chair Janet Yellen is to hold a press conference following announcement.
Thursday, September 18
The U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.