Australian, NZ Dollars Advance After Yesterday's Sell-off
01 December 2021 - 1:19PM
RTTF2
The Australian and NZ dollars climbed against their major
opponents in the Asian session on Wednesday, as investors digested
Fed Chair Jerome Powell's remarks signaling an acceleration in the
pace of tapering of bond purchases to counter inflationary
pressures.
In his testimony before the Senate Banking Committee on Tuesday,
Powell said that the description of the term 'transitory' for
inflation is no longer appropriate and signaled a discussion on
faster tapering of bond purchases when it meets this month.
Optimistic comments from China's Vice Premier Liu He also
underpinned sentiment.
Liu He said that China's annual economic growth is estimated to
exceed the expected target and pledged to create a better
environment for small and medium-sized enterprises and
foreign-funded enterprises.
Data from the Australian Bureau of Statistics showed that
Australia's gross domestic product expanded 3.9 percent on year in
the third quarter of 2021 - beating forecasts for an increase of
3.0 percent following the 9.6 percent jump in the previous three
months.
On a seasonally adjusted quarterly basis, GDP was down 1.9
percent - but that also beat forecasts for a drop of 2.7 percent
after rising 0.7 percent in the three months prior.
The aussie climbed to 5-day highs of 0.7173 against the
greenback and 81.44 against the yen, off its early lows of 0.7119
and 80.55, respectively. The aussie is seen finding resistance
around 0.73 against the greenback and 83.00 against the yen.
After falling to 1.5917 against the euro, 0.9095 against the
loonie and 1.0437 against the kiwi in early trades, the aussie
edged up to 1.5800, 0.9132 and 1.0457, respectively. If the aussie
rises further, 1.54, 0.94 and 1.06 are likely seen as its next
resistance levels against the euro, the loonie and the kiwi,
respectively.
The kiwi touched a 6-day high of 0.6863 against the greenback,
5-day high of 77.92 against the yen and a 2-day high of 1.6512
against the euro, following its prior lows of 0.6813, 77.06 and
1.6630, respectively. The kiwi is poised to find resistance around
0.70 against the greenback, 80.00 against the yen and 1.62 against
the euro.
Looking ahead, PMI reports from major European economies are due
in the European session.
U.S. ADP private payrolls data for November is scheduled for
release at 8:15 am ET.
Canada building permits for October, U.S. ISM manufacturing PMI
for November and construction spending for October are set for
release in the New York session.
Federal Reserve Chair Jerome Powell will testify on the CARES
Act, along with Treasury Secretary Janet Yellen before the House
Financial Services Committee in Washington DC at 10:00 am ET.
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