Australian Dollar Climbs Amid Risk Appetite
21 September 2016 - 06:41PM
RTTF2
The Australian dollar strengthened against most major
counterparts in European deals on Wednesday amid risk appetite, as
the Bank of Japan tweaked monetary policy, abandoning target to
expand the monetary base and instead set a "yield curve control" to
stoke inflation.
The yield on 10-year Japanese government bonds briefly rose
above zero for the first time since March as the central bank
introduced a zero interest-rate target for 10-year government bonds
in its fight against deflation.
Investors await the FOMC rate decision later today, although the
Federal Reserve is widely expected to leave its benchmark overnight
interest rate unchanged following its two-day meeting.
Market participants remain focused on the accompanying policy
statement and Fed Chair Janet Yellen's press conference for signs
of change in tone about the economy or future rate hikes.
In other economic news, the latest survey from Westpac Bank
showed that Australia's economy looks to be stagnant in the near
term, with a flat leading index reading.
That's down from the upwardly revised 0.08 percent gain in
July.
The currency has been trading higher against its major
opponents, except the Japanese yen, in the Asian session.
The aussie advanced to 1.0372 against the kiwi, its strongest
since September 7, from a low of 1.0311 hit at 9:15 pm ET.
Continuation of the aussie's uptrend may see it challenging
resistance around the 1.05 mark.
Data from Statistics New Zealand showed that New Zealand's net
migration increased in August from a year ago, after falling for
the first time in twenty-three months in July.
The country recorded a net migration of 69,100 in the year to
August 31, equaling the previous record set in June.
The aussie climbed to near 2-week highs of 1.4666 against the
euro and 0.7602 against the greenback, off its early lows of 1.4781
and 0.7534, respectively. The aussie is seen finding resistance
around 1.44 against the euro and 0.79 against the greenback.
The aussie bounced off to 1.0000 against the loonie, from an
early low of 0.9945. If the aussie extends rise, 1.05 is possibly
seen as its next resistance level.
Looking ahead, U.S. weekly crude oil inventories data is slated
for release shortly.
At 2:00 pm ET, the Federal Reserve will announce its decision on
monetary policy. The Fed is expected to hold its Federal Funds rate
in the range of 0.25-0.50 percent.
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