Australian, NZ Dollars Advance; Yen Falls As China Loosens Covid Curbs
The Australian and NZ dollars climbed against their major
counterparts in the Asian session on Monday, while the yen dropped
as an easing of some of virus restrictions in key Chinese cities
and receding expectations for aggressive rate hikes by the Federal
Reserve later this year underpinned risk sentiment.
Beijing and Shanghai relaxed Covid restrictions over the weekend
amid a drop in infections.
Beijing announced a partial reopening of some libraries, museums
and gyms and resumed most of public transport in the main business
area and ended work-from-home rules in some districts.
Shanghai, which was under a strict lockdown for nearly two
months, would lift some of the curbs on businesses from Wednesday
and offered more help for firms that includes reducing some taxes
for car buyers, delaying insurance and rent payments, as well as
subsidies for utility charges.
Data on U.S. personal consumption expenditure price index
released on Friday signaled that inflationary pressures could be
easing and raised hopes for a pause in the rate hike cycle after
two 50 basis point hikes each in June and July.
The aussie climbed to near a 4-week high of 0.7193 against the
greenback and near a 3-week high of 91.44 against the yen,
reversing from its early lows of 0.7153 and 90.88, respectively.
The aussie is seen facing resistance around 0.73 against the
greenback and 93.00 against the yen.
The aussie firmed to a 1-week high of 1.4958 against the euro,
more than 3-week high of 0.9131 against the loonie and a 5-day high
of 1.0973 against the kiwi, off its prior lows of 1.4999, 0.9102
and 1.0944, respectively. Next immediate resistance for the aussie
is seen around 1.47 against the euro, 0.93 against the loonie and
1.12 against the kiwi.
Recovering from its prior lows of 0.6523 against the greenback
and 82.93 against the yen, the kiwi appreciated to near a 4-week
high of 0.6558 and a 3-week high of 83.36, respectively. The kiwi
may challenge resistance around 0.68 against the greenback and
85.00 against the yen.
In contrast, the kiwi was down against the euro, with the pair
trading at 1.6449. On the downside, 1.66 is likely seen as its next
The yen weakened to a 4-day low of 160.87 against the pound and
near a 4-week low of 133.09 against the franc, following its
previous highs of 160.25 and 132.55, respectively. The next likely
support for the yen is seen around 163.00 against the pound and
135.00 against the franc.
After gaining to 99.73 against the loonie and 136.26 against the
euro earlier in the session, the yen slipped to a 10-day low of
100.27 and near a 3-week low of 136.90, respectively. If the yen
extends decline, 103.00 and 139.00 are possibly seen as its next
support levels against the loonie and the euro, respectively.
The yen was trading at a 4-day low of 127.39 against the
greenback, down from a high of 126.86 hit at 9:45 pm ET. The yen is
likely to target support around the 129.00 level.
AUD vs NZD (FX:AUDNZD)
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