Investing.com - The Australian dollar slumped to a more than six-month low against its U.S. counterpart on Friday, as growing expectations that the Federal Reserve will begin to raise rates sooner than previously thought boosted demand for the greenback.
AUD/USD hit a daily low of 0.8921 on Friday, a level not seen since March 4, before subsequently consolidating at 0.9038 by close of trade, down 0.66% for the day and 1.19% lower for the week.
The pair is likely to find support at 0.8888, the low from March 3 and resistance at 0.8995, the high from September 18.
The Federal Reserve cut its monthly bond-buying program by another $10 billion following its two-day policy meeting on September 17, keeping the program on track to finish next month.
While the Fed reiterated that it expects rates to remain on hold for a "considerable time" after its quantitative easing program ends, it also projected a faster pace of rate hikes.
For the end of 2015, the median forecast was 1.375% compared to a June forecast of 1.125%.
Speaking at the central bank’s post-policy meeting press conference, Fed Chair Janet Yellen emphasized that the timing of the first rate hike would be data-dependent.
Meanwhile, in the minutes of its September policy meeting published on September 16, the Reserve Bank of Australia reiterated its decision to keep interest rates on hold for an extended period of time and added that the exchange rate remains "above most estimates of its fundamental value."
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 16.
Net longs totaled 22,140 contracts, down from net longs of 41,229 in the preceding week.
In the week ahead, investors will be focusing on U.S. data on new and existing home sales, as well as reports on durable goods orders and initial jobless claims.
A recent batch of upbeat U.S. economic data underlined optimism over the strength of the economy and fuelled expectations that the Fed will begin to raise rates sooner than previously thought.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 22
The U.S. is to release private sector data on existing home sales.
Tuesday, September 23
China is to release the preliminary reading of its HSBC manufacturing index. The Asian nation is Australia's largest trade partner.
Wednesday, September 24
The Reserve Bank of Australia is to publish its financial stability review.
The U.S. is to publish data on new home sales.
Thursday, September 25
RBA Governor Glenn Stevens is to speak at an event in Melbourne; his comments will be closely watched.
The U.S. is to release reports on durable goods orders and initial jobless claims.
Friday, September 26
The U.S. is to release revised data on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health. The U.S. is also to release revised data on consumer sentiment.