Forex - AUD/USD weekly outlook: April 4-8

Investing.com – Last week saw the Australian dollar rally to an all-time high against its U.S. counterpart on Friday, as indications the global economic recovery was gaining momentum sharpened risk appetite and boosted demand for higher-yielding currencies.

AUD/USD hit 1.0394 on Friday, an all-time high; the pair subsequently consolidated at 1.0383 by close of trade, climbing 1.35% over the week.

The pair was likely to find support at 1.0306, Thursday’s low and resistance at 1.0394, Friday’s record high.

The Aussie remained well-supported maid increased demand for higher-yielding currencies. At present, benchmark interest rates are 4.75% in Australia, compared with zero in the U.S., attracting investors to the nations higher-yielding currency.

Meanwhile, the U.S. Department of Labor said Friday that payrolls rose by 216,000 in March after a 194,000 gain the prior month, outstripping expectations for a 188,000 increase. The unemployment rate unexpectedly slid to a two-year low of 8.8%, from 8.9% in February, the Labor Department said.

Also Friday, the China Federation of Logistics and Purchasing said that the country’s Purchasing Managers Index rose for the first time in four months in March, climbing to 53.4 from 52.2 in February. China is Australia’s largest trading partner.

On Thursday, the Australian Bureau of Statistics said that retail sales rose 0.5% to a seasonally adjusted AUD20.53 billion in February, outstripping expectations for a 0.4% increase.

In the week ahead, the Federal Reserve is to publish the minutes of its most recent policy setting meeting, while the U.S. is to publish its weekly report on initial jobless claims. Meanwhile, the Reserve Bank of Australia is to announce its benchmark interest rate.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, April 4

Australia is to begin the week by publishing a report on the number of jobs advertised in major daily newspapers and websites, an important indicator of demand in the employment market.

In the U.S., Federal Reserve Chairman Ben Bernanke is to speak at a public engagement; his comments will be closely watched for clues to the future possible direction of monetary policy.

Tuesday, April 5

The RBA is to announce its official cash rate. The bank’s rate statement will be closely watched as it discusses the economic outlook and offers clues on the outcome of future rate decisions. Australia is also to publish government data on its trade balance, the difference in value between imports and exports over the month.

Meanwhile, the Federal Reserve is to publish the minutes of the most recent policy setting meeting of the Federal Open Market Committee. The minutes contain in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates. In addition, the U.S. Institute of Supply Management is to publish a report on service sector growth, a leading indicator of economic health.

Wednesday, April 6

Australia is to publish government data on home loans issued, a leading indicator of demand in the housing market, while the U.S. is to produce a report on crude oil inventories.

Thursday, April 7

Australia is to release official data on employment change and the country’s unemployment rate, a leading indicator of economic health.

Meanwhile, the U.S. is to publish a key weekly report on initial jobless claims, the nation’s earliest employment data as well as data on consumer credit and natural gas inventories.

Friday, April 8

The U.S. is to round up the week with a report on wholesale inventories, an important indicator of future business spending.