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Money The Australian dollar continues to rally

18:32  03 january  2018
18:32  03 january  2018 Source:   businessinsider.com.au

Australia, New Zealand dollars near multi-week peak on metals, carry trades

  Australia, New Zealand dollars near multi-week peak on metals, carry trades By Swati Pandey

The Australian dollar continued to rally on Tuesday, hitting yet another multi-month high against the greenback. To Greg McKenna, chief market strategist at AxiTrader, the main factor behind the move was continued US dollar weakness.

The Australian dollar continued to rally against the greenback on Tuesday as weaker commodity prices was offset by lower US bond yields. The main event for markets today will be the release of US CPI for February.

  The Australian dollar continues to rally © Provided by Business Insider Inc

The Australian dollar continued to rally on Tuesday, hitting yet another multi-month high against the greenback.

Here's the scoreboard as at 8.10am AEDT.

AUD/USD0.7832,0.0029,0.37%
AUD/JPY87.91,0.02,0.02%
AUD/CNH5.0908,0.0091,0.18%
AUD/EUR0.6491,-0.0005,-0.08%
AUD/GBP0.5759,-0.0018,-0.31%
AUD/NZD1.1015,0.0036,0.33%
AUD/CAD0.9791,-0.001,-0.10%

After starting the session buying .7803, the AUD/USD rallied on the back of stronger-than-expected Chinese economic data, strength in Chinese stocks and broad-based US dollar weakness, eventually hitting a high of .7844 before easing lower in the second half of the session.

Australia, New Zealand dollars underpinned by upbeat China manufacturing activity

  Australia, New Zealand dollars underpinned by upbeat China manufacturing activity <p>The Australian and New Zealand dollars held firm on Tuesday as an unexpectedly upbeat survey of Chinese manufacturing activity and broad softness in their U.S. counterpart augured well for Antipodean commodity exports.</p>The Aussie dollar (AUD=D4) made a two-month top of $0.7827 before running into resistance. The next chart targets are $0.7884 and $0.7898, both peaks from October. The kiwi held at $0.7102 (NZD=D4), just off last week's high at $0.7124.

The Australian dollar put in a mixed performance on Thursday, continuing to rally against the greenback but losing ground against most other major crosses. Here’s the scoreboard showing the divergent performance during the session.

The Aussie sank to US73.22c as traders pushed up the US dollar in the wake of the Republican’s presidential victory.

It currently sits at the highest level since late October.

To Greg McKenna, chief market strategist at AxiTrader, the main factor behind the move was continued US dollar weakness.

Australia, New Zealand dollars supported by global commodity demand

  Australia, New Zealand dollars supported by global commodity demand <p>The Aussie dollar (AUD=D4) was steady at $0.7826</p>The Aussie dollar (AUD=D4) was steady at $0.7826, having made a fresh three-month top at $0.7845 overnight. It faces stiff chart resistance at $0.7884 and $0.7898, twin peaks from October.

The Australian dollar rallied initially during the week, reaching as high as the 0.77 level before rolling over. Pullbacks like will continue to offer value in the current market and will continue to rally using the 1.33 level underneath as strong support level.

Lower demand for higher risk assets is helping to drive the AUD /USD lower on Friday. Traders are also taking profits after a nearly month-long rally . The Australian dollar has gone sideways in general, as we continue to dance around the 0.7650 level.

"On currency markets it was a simple process of rinse and repeat as the US dollar came under heavy selling pressure once again," he said in his morning note. "It did mount a fight back after solid European manufacturing PMIs was countered with US manufacturing strength, but it is generally weaker across the board."

At 91.832, the US dollar index (DXY) -- heavily influenced by movements against the euro -- is currently down 0.32% for the session, extending its decline from early November to 3.5%.

McKenna says that for this trend in the DXY to reverse, it will require either a softer batch of European economic data releases or a material strengthening in upcoming US economic data, something that typically does not occur in the first quarter of the year.

"When it comes to other currencies, the USD weakness is a big factor in the rallies we are seeing," he adds.

a close up of a map© Provided by Business Insider Inc

Whether that trend will continue on Wednesday will likely be determined by sentiment and technicals rather than economic data.

There's next to no major data releases scheduled in Australia or abroad, and Japanese markets are on holiday.

German unemployment data for December, along with manufacturing PMI and construction spending figures from the US, are the headline acts for the session.

On the central bank front, the US Federal Reserve will release the minutes of of its December FOMC monetary policy meeting, an event where the Fed raised the funds rate by an additional 25 basis points.

Most of the focus will likely be on the commentary relating to the inflation outlook given the Fed's underlying CPI forecasts were left unchanged at this meeting despite most members factoring in the impact of tax xcuts delivered by the Trump administration in late December.

The minutes will arrive at 6am AEDT Thursday in Australia.

Aussie dollar teeters on the edge of 79 US cents .
The Australian has extended the lift it gained from strong retail trade figures on Thursday, and is heading toward the 79 US cent mark.At 0635 AEDT on Friday, the Australian dollar was worth 78.92 US cents, up from 78.74 US cents on Thursday.

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