Commodity Currencies Extends Gain Amid Rising Risk Appetite
January 21 2016 - 6:06PM
RTTF2
Commodity currencies such as the Australian, the New Zealand and
the Canadian dollars continued to be strong against their major
counterparts in the Asian session on Friday amid rising risk
appetite, as the rebound in crude oil prices and expectations of
more stimulus from the European Central Bank boosted investor
sentiment.
European Central Bank President Mario Draghi on Thursday hinted
that more stimulus measures may come in March as the downside risks
such as global uncertainty, market volatility and geopolitical
tensions have increased.
Crude oil for March delivery are currently up $0.11 at $29.64 a
barrel. Crude oil futures rallied Thursday as traders bet the
recent collapse in energy prices was overdone.
Thursday, the Australian, the New Zealand and the Canadian
dollars rose against their major counterparts amid the rebound in
oil prices.
The Australian dollar rose 1.32 percent against the U.S. dollar,
1.46 percent against the yen and 1.43 percent against the euro. The
NZ dollar rose 1.89 percent against the U.S. dollar, 2.30 percent
against the yen and 1.74 percent against the euro. The Canadian
dollar rose 1.64 percent against the U.S. dollar, 2.27 percent
against the yen and 1.76 percent against the euro.
In the Asian trading, the Australian dollar rose to a 9-day high
of 0.7021 against the U.S. dollar and a 1-week high of 82.79
against the yen, from yesterday's closing quotes of 0.6998 and
82.36, respectively. If the aussie extends its uptrend, it is
likely to find resistance around 0.71 against the greenback and
86.00 against the yen.
The aussie advanced to 1.5454 against the euro, from yesterday's
closing value of 1.5532. On the upside, 1.52 is seen as the next
resistance level for the aussie.
Against the New Zealand and the Canadian dollars, the aussie
edged up to 1.0738 and 1.0013 from yesterday's closing quotes of
1.0711 and 0.9981, respectively. The aussie may test resistance
around 1.09 against the kiwi and 1.01 against the loonie.
The NZ dollar rose to 0.6547 against the U.S. dollar and 77.19
against the yen, from yesterday's closing quotes of 0.6525 and
76.81, respectively. The kiwi may test resistance near 0.66 against
the greenback and 79.00 against the yen.
Against the euro, the kiwi edged up to 1.6581 from yesterday's
closing value of 1.6633. If the kiwi extends its uptrend, it is
likely to find resistance around the 1.51 region.
The Canadian dollar rose to a 9-day high of 82.74 against the
yen, from yesterday's closing value of 82.48. If the loonie extends
its uptrend, it is likely to find resistance around the 86.00
area.
Against the U.S. dollar and the euro, the loonie edged up to
1.4253 and 1.5444 from yesterday's closing quotes of 1.4265 and
1.5509, respectively. The loonie may test resistance near 1.40
against the greenback and 1.51 against the euro.
Meanwhile, the safe-haven yen fell against its major rivals amid
rising risk appetite.
Data from Nikkei showed that the manufacturing sector in Japan
continued to expand in January, albeit at a slightly lower pace,
with a PMI core of 54.2. That was shy of expectations for 52.8, and
it was down from 52.6 in December, although the index remained well
above the boom-or-bust line of 50 that separates expansion from
contraction. The yen fell to 3-day lows of 167.81 against the pound
and 117.95 against the U.S. dollar, from yesterday's closing quotes
of 167.35 and 117.67, respectively. If the yen extends its
downtrend, it is likely to find support around 172.00 against the
pound and 119.00 against the greenback.
Against the euro and the Swiss franc, the yen edged down to
128.16 and 117.00 from yesterday's closing quotes of 127.91 and
116.79, respectively. The yen may test support near 130.00 against
the euro and 119.00 against the franc.
Looking ahead, European Central Bank President Mario Draghi and
European Central Bank member Benoit Coeure will participate in a
panel discussion at the World Economic Forum in Davos at 2:45 am ET
in the pre-European session.
Flash PMI reports from major European economies for January and
U.K. public finance data and retail sales data, for December, are
due to be released later in the day.
At 3:30 am ET, German Bundesbank President Jens Weidmann is
expected to speak at Symposium in honor of Professor Hans-Werner
Sin in Munich.
Shortly after Bank of Austria Governor Ewald Nowotny will speak
at the economic reporters' club in Vienna.
At 7:00 am ET, Bank of England Deputy Governor Jon Cunliffe will
deliver a speech titled "The Bank of England in Europe: Does
European Union Membership Constrain Non-Euro Central Banks?" at the
Bruegel Research Institute in Brussels.'
Subsequently, Irish central bank Governor Philip Lane will
deliver his first speech, in Dublin.
In the New York session, Canada CPI data for December and retail
sales data for November and U.S. existing home sales data and
leading indicator, both for December, are slated for release.
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