Antipodean Currencies Rise Amid Risk Appetite, Fed Decision
02 November 2023 - 2:14AM
RTTF2
Antipodean currencies such as the Australia and the New Zealand
dollars strengthened against their major counterparts in the Asian
session amid risk appetite, after a hawkish interest-rate hold by
the Federal Reserve fueled hopes that the U.S. central bank is done
with rate hikes.
The Fed acknowledged the U.S. economy's surprising strength, but
also nodded to the tighter financial conditions faced by businesses
and households - alleviating the need for a further rate hike.
The dollar tracked Treasury yields lower, helping gold prices
push higher. Oil rebounded from a one-month low on apprehensions
the Middle East conflict may spread.
In economic news, data from the Australian Bureau of Statistics
showed that Australia posted a merchandise trade surplus of A$6.786
billion in September. That was well shy of expectations for a
surplus of A$9.50 billion following the A$9.64 billion surplus in
August.
Exports were down 1.4 percent on month to A$45.623 billion after
adding 4.0 percent in the previous month. Imports jumped 7.5
percent on month to A$38.836 billion after easing 0.4 percent a
month earlier.
In the Asian trading now, the Australian dollar rose to nearly a
5-week high of 96.77 against the yen, from a recent low of 96.61.
On the upside, 98.00 is seen as the next resistance level for the
aussie.
Data from the Bank of Japan showed that the monetary base in
Japan jumped 9.0 percent on year in October, coming in at 670.612
trillion yen. That exceeded expectations for an increase of 5.6
percent, which would have been unchanged from the September
reading.
Against the U.S. dollar and the euro, the aussie advanced to
more than 3-week highs of 0.6439 and 1.6456 from yesterday's
closing quotes of 0.6422 and 1.6484, respectively. If the aussie
extends its uptrend, it is likely to find resistance around 0.65
against the greenback and 1.63 against the euro.
The aussie appreciated to more than a 3-month high of 0.8906
against the Canadian dollar, from yesterday's closing value of
0.8884. The next possible upside target for the aussie is seen
around the 0.90 region.
The aussie edged up to 1.0935 against the NZ dollar, from
Wednesday's closing value of 1.0924. The aussie may test resistance
around the 1.10 region.
The NZ dollar rose to more than 2-week highs of 0.5897 against
the U.S. dollar and 1.7971 against the euro, from yesterday's
closing quotes of 0.5879 and 1.8009, respectively. If the kiwi
extends its uptrend, it is likely to find resistance around 0.60
against the greenback and 1.77 against the euro.
Against the yen, the kiwi edged up to 88.62 from a recent low of
88.44. The kiwi may test resistance around the 89.00 region.
Meanwhile, the safe-haven currency, the U.S. dollar fell against
its major rivals, following the comments from Fed Chair Jerome
Powell after its two-day policy meeting suggesting that rate hikes
were done.
The U.S. dollar fell to 2-day lows of 1.0602 against the euro
and 1.2197 against the pound, from yesterday's closing quotes of
1.0587 and 1.2181, respectively. If the greenback extends its
downtrend, it is likely to find support around 1.07 against the
euro and 1.23 against the pound.
Against the yen, the Swiss franc and the Canadian dollar, the
greenback dropped to 2-day lows of 150.15, 0.9025 and 1.3824 from
Wednesday's closing quotes of 150.57, 0.9056 and 1.3836,
respectively. The greenback may test support near 147.00 against
the yen, 0.89 against the franc and 1.36 against the loonie.
Looking ahead, Switzerland inflation data for October, consumer
confidence for the fourth quarter, German unemployment rate for
October, German and the eurozone HCOB manufacturing PMI data for
October, are slated for release in the European session.
In the New York session, U.S. weekly jobless claims and factory
orders for September are set to be published.
At 8:00 am ET, the Bank of England is set to announce its
monetary policy decision. Economists expect the Monetary Policy
Committee to leave the benchmark lending rate at 5.25 percent.
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