By FX Empire.com
The Australian dollar ended a good week versus the dollar and major currencies, where it traded near the highest level in more than 3 weeks versus the American dollar as a rally in stocks spurred demand for higher-yielding assets and Germany and France pledged to deliver a plan to support banks and contain the debt crisis.
Moreover, Aussie increased sharply versus its major counterpart the US dollar as the Australian economy reported positive employment data which confirmed the nation’s ongoing recovery.
As for the European debt crisis, the leaders are going to introduce more measures to contain the escalating sovereign crisis while Slovakia ratified the EFSF changes and the facility is now operational which further eased the woes ahead of the coming EU summit on October 23 when the measures might be announced.
Australia’s currency pared earlier losses after minutes of the central bank’s policy meeting this month said the Reserve Bank is “well placed” to respond to global and domestic economic risks and inflation.
Major highlights for this week that will affect the AUD/USD pair’s trading
Monday October 17:
The week starts with the release of important data from both economies. As of 00:00 GMT the Australian consumer inflation expectations index is expected to rise to 3.0% in October 2.8% in September.
The U.S. economy will release the Empire Manufacturing survey for October at 12:30 GMT where the index is expected to improve to -4.0 from -8.82.
The Industrial Production for September will be released from the U.S. economy at 13:15 GMT and expected to maintain the same expansionary pace as the previous month of 0.2%. On the other hand, the Capacity Utilization is expected to rise to 77.5% from 77.4%.
Tuesday October 18:
The Reserve Bank of Australia will release the October minutes at 00:30 GMT, which will be closely assessed for any policy hints and whether the RBA considers cutting rates amid a challenging global environment.
On Tuesday at 12:30 GMT, the U.S. economy will issue the Producer Price Index for September where it’s expected to come at 0.2% from the prior reading of 0.0%, while the annual Producer Price Index is expected to ease to 6.4% from 6.5%.
The U.S. Net Long-term TIC Flows for August will be released at 13:00 GMT, where the previous reading was $9.5 billion, as for Total Net TIC Flows it recorded net selling of $51.8 billion the previous month.
Wednesday October 19:
Australia’s Westpac leading index for August will be released at 23:30 GMT (Tuesday) after the reported 0.50% rise in July.
The U.S. economy will issue the Consumer Price Index for September at 12:30 GMT, where it’s expected to come at 0.3% from the previous reading of 0.4%, as for the annual Consumer Price Index it’s expected to hold at 3.8%.
The U.S. Housing Starts for September will be released as well at 12:30 GMT with and expected to rise to 595 thousand by 3.9% from the previous 571 thousand. The Building Permits on the other hand are expected with a drop by 2.4% to 610 from 620 thousand.
Thursday October 20:
The NAB quarterly business confidence is due from Australia at 00:30 GMT after it declined the previous reading to 6.0.
On Thursday at 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 404 thousand last week.
The Leading Indicators for September will released at 14:00 GMT and expected to slow to 0.2% from 0.3%. The Philadelphia Fed index is also due at 14:00 GMT and expected to improve to -9.5 from -17.5.
As for the Existing Home Sales for September it’s expected with a drop of 2.65% to 4.91 million from 5.03 million.
Friday October 21:
Both economies will not release any fundamentals and the pair will be affected by the prevailing economic sentiment.
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