Antipodean Currencies Rise On Positive Cues From Wall Street
February 21 2017 - 7:31PM
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Antipodean currencies such as the Australian and the New Zealand
dollars strengthened against their major counterparts in the Asian
session on Wednesday as risk appetite rose following the positive
cues overnight from Wall Street. However, gains are modest as
investors turned cautious ahead of the release of the U.S. Federal
Reserve minutes later in the day.
The Federal Reserve minutes are expected to provide more insight
on the probability of an interest rate increase at the Fed's March
meeting.
Investors are also digesting mixed corporate earnings
results.
Crude oil delivery for April is currently up by 0.19 percent or
$54.52 per barrel. Crude oil prices rose as OPEC Secretary General
Mohammad Barkindo discussed the cartel's supply quota
agreement.
In economic news, data from Westpac Bank showed that the
Australian economy continued to expand in January, albeit at a
slower pace, adding just 0.03 percent to its index. That follows
the 0.43 percent growth in December, and it marks the sixth
straight month of above-trend growth.
The Australian Bureau of Statistics said that wage growth in
Australia was up a seasonally adjusted 0.5 percent on quarter in
the fourth quarter of 2016. That was in line with expectations and
up from 0.4 percent in the third quarter.
The Australian Bureau of Statistics also said that the total
value of construction work done in Australia was down a seasonally
adjusted 0.2 percent on quarter in the fourth quarter of 2016,
coming in at A$46.263 billion. That missed forecasts for an
increase of 0.5 percent following the upwardly revised 4.4 percent
contraction in the third quarter.
Data from the Reserve Bank of New Zealand showed that total
credit card spending in New Zealand increased for the second
straight month in January. Credit card spending edged up 0.2
percent month-over-month In January, much slower than the 3.2
percent climb in December. On an annual basis, credit card spending
growth eased to 7.1 percent from 8.6 percent in the previous
month.
Tuesday, the Australian and the New Zealand dollars showed mixed
trading against their major rivals. The Australian dollar fell
against the U.S. dollar, while it rose against the yen and the
euro. Meanwhile, the NZ dollar fell against the U.S. dollar, but it
rose against the yen and the euro.
In the Asian trading, the Australian dollar rose to nearly a
2-year high of 1.3708 against the euro, from yesterday's closing
value of 1.3723. The aussie may test resistance near the 1.36
region.
Against the U.S. dollar and the yen, the aussie advanced to
5-day highs of 0.7698 and 87.39 from yesterday's closing quotes of
0.7673 and 87.24, respectively. If the aussie extends its uptrend,
it is likely to find resistance around 0.78 against the greenback
and 88.00 against the yen.
The aussie edged up to 1.0736 against the NZ dollar and 1.0096
against the Canadian dollar from yesterday's closing quotes of
1.0715 and 1.0082, respectively. On the upside, 1.08 against the
kiwi and 1.01 against the loonie are seen as the next resistance
level for the aussie.
The NZ dollar rose to a 5-day high of 81.44 against the yen from
an early low of 81.23. The kiwi may test resistance near the 83.00
region.
Against the euro, the kiwi advanced to 1.4703 from an early low
of 1.4735. This may be compared to an early 6-day high of 1.4702.
On the upside, 1.45 is seen as the next resistance level for the
kiwi.
Against the U.S. dollar, the kiwi edged up to 0.7175 from
yesterday's closing value of 0.7161. If the kiwi extends its
uptrend, it is likely to find resistance around the 0.73
region.
Looking ahead, the German Ifo business climate index for
February, Swiss ZEW economic expectation index for January, U.K.
second estimate GDP data for the fourth quarter and Eurozonze CPI
data for January are due to be released later in the day.
In the New York session, Canada retail sales data for December
and U.S. existing home sales data for January are slated for
release.
At 10:00 am ET, Federal Reserve Governor Jerome Powell will
deliver a speech titled "The Economic Outlook and Monetary Policy"
at the Forecaster's Club of New York Luncheon.
At 2:00 pm ET, Federal Open Market Committee is expected to
release the minutes of its January policy meeting.
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