Australian Dollar Rises, U.S. Dollar Falls On Fed Optimism
The Australian dollar climbed against its major counterparts in
the Asian session on Thursday, while the U.S. dollar slipped as Fed
Chair Jerome Powell's pledge to maintain interest rates lower eased
some worries about inflation.
In his testimony before the House Financial Services Committee,
Powell reiterated that the Fed is in no rush to raise its benchmark
short-term interest rates or to start tapering its bond buying
Powell reiterated that inflation and employment remain well
below the central bank's objectives and would require some time for
substantial further progress to be achieved.
Promising new data on Johnson & Johnson's coronavirus
vaccine and a much bigger than expected jump in new home sales in
the U.S. in the month of January also boosted sentiment.
U.S. House Democrats gear up for a vote on the $1.9 trillion
Biden stimulus package, which includes $1,400 checks to most
Americans. However, the plan faces staunch opposition from
Republicans and is still subject to negotiations.
Investors await economic data on U.S. initial jobless claims,
durable goods orders and pending home sales due later in the day.
The greenback dropped to 1.4170 against the pound and 0.9056
against the franc, from its early highs of 1.4122 and 0.9075,
respectively. The greenback is poised to find support around 1.45
against the pound and 0.90 against the franc.
The greenback dipped to more than a 4-week low of 1.2183 against
the euro, off its prior high of 1.2156. Against the loonie, the
U.S. currency touched 1.2495, its lowest level since February 2018.
The greenback is likely to challenge support around 1.24 against
the euro and 1.21 against the loonie.
The greenback that closed yesterday's deals at 0.7433 against
the kiwi weakened to 0.7448. Next key support for the currency is
seen around the 0.76 region.
In contrast, the greenback remained higher at an 8-day high of
106.14 versus the yen. Immediate resistance for the dollar is found
near the 108.00 level.
The aussie spiked up to more than 3-year highs of 0.7993 against
the greenback and 84.79 against the yen, after falling to 0.7953
and 84.25, respectively in early deals. The aussie is seen finding
resistance around 0.82 against the greenback and 86.00 against the
The aussie reversed from its early lows of 1.0694 against the
kiwi and 0.9951 against the loonie, gaining to 1.0734 and 0.9987,
respectively. If the aussie rises further, 1.10 and 1.02 are
possibly seen as its next resistance levels against the kiwi and
the loonie, respectively.
The aussie hovered at 1.5253 against the euro, its biggest level
since January 2018. On the upside, 1.50 is possibly seen as its
next resistance level.
Looking ahead, Eurozone economic confidence index for February
is set for release in the European session.
U.S. durable goods orders for January, GDP data for the fourth
quarter, weekly jobless claims for the week ended February 20 and
pending home sales for January will be featured in the New York