The Australian currency, nicknamed Aussie, gained versus its major counterpart the US dollar after the European Finance Ministers announced a plan to contain the debt crisis, which supported the risk appetite and supported demand for high yielding currencies.
The Australian dollar soared to the highest level in more than seven weeks against the greenback on European optimism, supporting demand for Aussie. The EU leaders announced the plan that focused on bank recapitalization, 50% Greek bonds write-downs and expanding the firepower of the EFSF to one trillion euros.
This week the focus will be on the RBA rate decision alongside more Chinese manufacturing data that is Australia’s main export market. Despite the reported decline in inflationary pressures, the RBA is still expected to keep rates on hold and easing market tension will lower expectations for a cut for now.
Also the FOMC from the U.S. and the infamous October jobs report will have the main focus this week as investors need to see more positive signs to ensure sustained growth, especially as the GDP from the states last week helped as well in easing recessionary fears and the worries over the outlook.
Major highlights for this week that will affect the AUD/USD pair’s trading:
Monday October 31:
At 13:45 GMT, the U.S. economy will release the Chicago Purchasing Manager for October which is expected to ease to 59.0 from 60.4.
Tuesday November 01:
The Australian economy will release critical economic data that have a medium and high impact on the Australian currency’s movements, starting with the AiG Performance of Manufacturing Index at 22:30 GMT (Monday) after it recorded 42.3 the previous month.
At 00:30 GMT Australia will release the quarterly reading for house price index for the third quarter, which had a prior reading of -0.1%. On the year it had a previous of -1.9%.
At 03:30 GMT the RBA will announce the rate decision and the bank is expected to keep rates steady at 4.75%.
At 05:30 GMT we have the monthly RBA Commodity Price Index for October that has a medium impact on the market, which had a previous reading of 115.4, along with the annual RBA Commodity Index SDR that inclined 26.6%.
The U.S. economy will issue the Construction Spending for September at 14:00 GMT, where it’s expected to come at 0.3% from the prior reading of 1.4%.
The ISM Manufacturing for October will be released at the same time, and expected at 52.3 from the previous reading of 51.6.
Wednesday November 02:
At 00:00 GMT, Australia will release the monthly new home sales figures for September which had a prior reading of 1.1%.
At 00:30 GMT will be the release of the monthly building approvals for September, where the prior reading rose 11.4%, and on the year it had a previous of 5.5%.
The U.S. economy will release the ADP employment change for August at 12:15 GMT, where it’s expected at 101 thousands from the previous reading of 91 thousands.
At 16:30 GMT, the Federal Open Market Committee will announce its Rate Decision, which is expected to be steady between 0.0% and 0.25%; and at 18:15 GMT Fed’s Governor Bernanke will speak at the Fed Press Conference.
Thursday November 03:
At 22:30 GMT (Wednesday) Australia will release the AiG performance of service index for October which recorded 50.3 the previous month.
At 00:30 GMT we the Retail Sales for September, which had a prior reading of 0.6%, along with the quarterly reading for retail sales excluding inflation for the third quarter, while it had a prior reading of 0.3%.
On Thursday at 12:30 GMT, the U.S. economy will release the Non-Farm Productivity for the third quarter, where the preliminary reading is expected to come at 2.5% from the prior reading of -0.7%.
The Unit Labor Costs for the third quarter is expected to come at -0.4% from the previous reading of 3.3%.
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 402 thousand last week.
The U.S. ISM Non-Manufacturing Composite for September will be released at 14:00 GMT, where it’s expected to come at 54.0 from the prior reading of 53.0.
Friday November 04:
The United States of America will release the non-farm payrolls at 12:30 GMT, which is expected to show that the U.S. economy added 100 thousand jobs during the month of October compared with the previous reading of 103 thousand jobs.
Unemployment rate during the month of October is expected to be steady at 9.1%, while the yearly average hourly earnings index had a previous reading of 1.9%.
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