The Australian Dollar to US Dollar (AUD/USD) exchange rate advanced by over 0.8% towards the close of the week thanks to an uptick in gold prices.
During the Australasian session the Australian Dollar to US Dollar (AUD/USD) exchange rate fluctuated following the publication of below forecast Australian data and controversial comments from a Federal Reserve official.
According to currency trader Stephen Innes; ‘We had a choppy 24-hour price action but we saw the market running into good selling on any news driving uptick [on the Aussie] the current price action is pointing to a market trapped between good selling on AUD/USD pair with strong demand for the Aussie versus the Euro. This is effectively underpinning the AUD/USD. It feels like only a break of the psychological 80.0 US Dollar barrier or a break of 0.82 is needed to shake the market up a bit.’
The Australian Dollar managed to continue trending higher against several of its most traded currency counterparts even as the Australian construction sector sunk further into contraction territory and the nation’s retail sales gain fell short.
The AiG Performance of Construction index dropped from 45.4 to 44.4 in December.
AiG said of the figure; ‘This indicated that the national construction industry contracted at a slightly steeper rate in December 2014, reflecting further falls in activity and new orders. This decline led to further cuts in employment and a renewed decline in deliveries from suppliers. December was the second consecutive month that the Australian PCI has been below the critical 50-points level that separates expansion from contraction, following the industry’s return to growth in mid-2014. December signalled the construction industry’s steepest contraction since February 2014.’
The AUD/USD exchange rate was boosted both by an increase in gold prices and comments from a Federal Reserve official regarding the detrimental impact of a 2015 interest rate hike.
Although the US Non-Farm Payrolls report showed a stronger than forecast increase in positions in December, the AUD/USD exchange rate continued trading higher during the North American session.
Next week Australian reports with the most potential to inspire AUD/USD exchange rate movement include the nation’s Home Loans/Investment Lending reports and employment figures for December.
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trading in the region of 0.8194 during the European session.
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