The Australian dollar ended close to the lowest level in more than four years against the U.S dollar in last weeks trading session, amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
Also, the preliminary reading of the University of Michigan’s consumer sentiment index released on Friday rose to 93.8, the highest level since January 2007 and ahead of forecasts of 89.7. Consumer sentiment was boosted by the improving outlook for employment and wage growth and lower gasoline prices.
Meanwhile, official data released Friday showed that industrial production in China rose 7.2% in November, missing expectations for an increase of 7.5% and slowing from a 7.7% gain in October.
The disappointing data added to fears that China will miss its annual growth target of 7.5% and boosted speculation that the government will need to roll out fresh stimulus measures to avert a sharper slowdown.
The Asian nation is Australia’s largest trade partner.
Weekly bias remains on the downside as 21 and 55 Exponential Moving Average are crossed southward in the 1 hour, 4 hours, Daily, Weekly and Monthly charts. More-so, SSRC(stochastic), RSI and MACD are showing bearish momentum is still intact in the pair. More decline to 0.81200 Weekly Support 2 is expected in the pair.
Later this week investors will be awaiting the outcome of Wednesday’s Federal Reserve policy meeting amid speculation that policymakers could drop an assurance that interest rates will stay low for a “considerable time”.