Australian Dollar Climbs Amid Risk Appetite
24 October 2016 - 3:19PM
RTTF2
The Australian dollar advanced against its major rivals in the
Asian session on Monday, as Asian markets advanced, with China
pacing the gains, amid optimism that the Chinese officials will
ramp up infrastructure spending and speed up structural reforms at
state-owned enterprises.
China's most elite Communist Party cadres - the country's top
decision-makers - are gathering in Beijing this week for a four-day
meeting in the run-up to a major party leadership reshuffle next
year.
The sixth plenum that kicked off today focus primarily on "key
issues concerning the comprehensive and strict management of the
Party," the future of Chinese President Xi Jinping's hallmark
anti-corruption campaign.
Investors brace for a wave of earnings and manufacturing reports
from the U.S. this week for further clues on the direction of
global monetary policy.
Key U.S. economic data this week include consumer confidence,
new home sales, durable goods orders and third quarter GDP, which
could shed more clues on the health of the economy.
The currency has been trading lower against most major rivals on
Friday amid risk aversion, as ECB President Mario Draghi refrained
from saying anything on QE extension and Fed voting member William
Dudley reiterated that a rate hike is on the cards by the end of
2016.
The aussie spiked up to more than a 2-year high of 1.0178
against the loonie, from its previous low of 1.0133. Continuation
of the aussie's uptrend may lead it to a resistance around the 1.03
zone.
The aussie bounced off to 0.7634 against the greenback and
1.4256 against the euro, reversing from its early lows of 0.7591
and 1.4318, respectively. The next possible resistance for the
aussie is seen around 0.78 against the greenback and 1.40 against
the euro.
The aussie came off from an early low of 78.88 against the yen,
edging higher to 79.22. The aussie is seen finding resistance
around the 82.00 mark.
Survey figures from IHS Markit showed Japan's manufacturing
activity expanded at the fastest pace in nine months in
October.
The Nikkei Flash Manufacturing Purchasing Managers' Index, or
PMI, rose to 51.7 in October from 50.4 in September.
The aussie climbed to 1.0648 against the kiwi, off its previous
low of 1.0613. Further uptrend may take the aussie to a resistance
around the 1.08 region.
Looking ahead, Canada wholesale sales for August are set for
release at 8:30 am ET.
At 9:00 am ET, the Federal Reserve Bank of New York President
William Dudley will deliver opening remarks at the Federal Bank of
New York Annual Conference.
Subsequently, Federal Reserve Bank of St. Louis President James
Bullard speaks about the economy and monetary policy at the
Association for University Business and Economic Research in
Arkansas.
Markit's U.S. flash manufacturing PMI for October will be out at
9:45 am ET.
The Swiss National Bank Chairman Thomas Jordan speaks about
monetary policy with negative interest rates at the University of
Basel at 12:15 pm ET.
The Bank of Canada Governor Stephen Poloz, will testify along
with Senior Deputy Governor Carolyn Wilkins before the House of
Commons Standing Committee on Finance in Ottawa at 3:30 pm ET.
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