Commodity currencies such as the Australian, the New Zealand and
the Canadian dollars strengthened against their major counterparts
in the Asian session on Tuesday influenced by risk appetite, as
crude oil prices rose above the $50 mark in Asian trades. Investors
are also digesting the minutes of the Reserve Bank of Australia's
monetary policy meeting held earlier in October, when the central
bank kept the benchmark lending rate unchanged.
Crude for November delivery is currently up by 0.27 percent or
$50.21 per barrel. The crude oil prices slipped following signs
that Iran will pick up the slack when Saudi Arabia and Russia curb
output. Meanwhile, traders expect the oil market is not likely to
be oversupplied.
Meanwhile, the Australian dollar rose after the release of RBA
minutes.
Members of the Reserve Bank of Australia's monetary policy board
expect the Australian economy to see a gradual slowing in the short
term before recovering, minutes from the bank's October 4 meeting
revealed. There remains a high degree of uncertainty in the
domestic labor and housing markets, the minutes showed.
The economists see no significant change in the outlook for
inflation. So the prospects for a rate cut at the November board
meeting are remote.
The NZ dollar rose following the release of upbeat CPI data.
Data from Statistics New Zealand showed that consumer prices in
New Zealand were up 0.2 percent on quarter in the third quarter of
2016. That exceeded forecasts for a flat reading following the 0.4
percent increase in the second quarter.
On a yearly basis, consumer prices added 0.2 percent versus
expectations for 0.1 percent and down from 0.4 percent in the three
months prior.
Traders also await the Global Dairy Trade auction, due later in
the day.
Speaking to Citi's 8th Annual Australian & New Zealand
Investment Conference in Sydney, the Reserve Bank of Australia
Governor Philip Lowe said that he expects inflation rate to again
edge up to its target range over the next couple of years. Also,
there is a need to guard against inflation expectations falling too
far, he said.
In other economic news, data from the Australian Bureau of
Statistics showed that the total number of new motor vehicle sales
in Australia was up seasonally adjusted 2.5 percent on month in
September, coming in at 100,640. That follows the downwardly
revised flat reading in August. Monday, the Australian dollar held
steady against its major rivals.
The NZ dollar rose 0.11 percent against the U.S. dollar, 0.16
percent against the yen and 0.40 percent against the euro.
The Canadian dollar showed mixed trading against its major
rivals. While the loonie rose against the euro and the yen, it held
steady against the U.S. dollar.
In the Asian trading, the Australian dollar rose to a 10-month
high of 1.4360 against the euro and a 2-week high of 0.7675 against
the U.S. dollar, from yesterday's closing quotes of 1.4417 and
0.7628, respectively. If the aussie extends its uptrend, it is
likely to find resistance around 1.42 against the euro and 0.77
against the greenback.
Against the yen and the Canadian dollar, the aussie advanced to
4-day highs of 79.68 and 1.0047 from yesterday's closing quotes of
79.23 and 1.0010, respectively. The aussie may test resistance
around 81.00 against the yen and 1.02 against the loonie.
The NZ dollar rose to nearly a 4-week high of 1.5303 against the
euro and an 8-day high of 1.0622 against the Australian dollar,
from yesterday's closing quotes of 1.5410 and 1.0691, respectively.
If the kiwi extends its uptrend, it is likely to find resistance
around 1.51 against the euro, and 1.05 against the aussie.
Against the U.S. dollar and the yen, the kiwi advanced to near
2-week highs of 0.7189 and 74.63 from yesterday's closing quotes of
0.7133 and 74.09, respectively. The kiwi is likely to find
resistance around 0.73 against the greenback and 75.00 against the
yen.
The Canadian dollar rose to more than a 2-week high of 1.3083
against the U.S. dollar, from yesterday's closing value of 1.3127.
On the upside, 1.29 is seen as the next resistance level for the
loonie.
Against the yen and the euro, the loonie advanced to 79.34 and
1.4416 from yesterday's closing quotes of 79.11 and 1.4438,
respectively. If the loonie extends its uptrend, it is likely to
find resistance around 80.00 against the yen, and 1.43 against the
euro.
Looking ahead, U.K. consumer price, producer price, retail price
indexes for September and house price index for August are due to
be released at 4:30 am ET.
In the New York session, Canada manufacturing sales data for
August, U.S. CPI data for September and NAHB's U.S. housing market
index for October are slated for release.
At 8:00 am ET, New Zealand's Global Dairy Trade auction is due
to be held.
At the same time, European Parliament's Brexit negotiator Guy
Verhofstadt is expected to speak at conference on future of EU
budget, reform of EU institutional set-up, in Brussels.
At 9:00 am ET, European Commission First Vice-President Frans
Timmermans is expected to speak at the General Affairs Council
meeting, in Luxembourg.
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