Commodity Currencies Rally; Yen Drops On China Stimulus Hopes
11 February 2020 - 2:05PM
RTTF2
The commodity currencies such as the Australian, the New Zealand
and the Canadian dollars climbed against their major counterparts
in the Asian session on Tuesday, as Asian stock markets followed
Wall Street higher amid receding concerns over the coronavirus
outbreak.
Worries about the virus temporarily receded on stronger U.S.
corporate earnings and hopes of economic stimulus measures from
China.
The death toll in China surpassed 1,000, with more than 42,000
cases confirmed.
Investors cheered comments from Chinese President Xi Jinping,
who said that "the impact of the novel coronavirus epidemic on the
economy is short-lived."
Earnings reports from companies such as Alibaba Group Holding
Ltd., Credit Suisse Group AG and Nestle SA are also due this
week.
Federal Reserve Chairman Jerome Powell will give semi-annual
testimony to Congress, with markets awaiting any clues on the
impact of the virus on the economy and monetary policy.
The aussie rose to 4-day highs of 0.6719 against the greenback
and 0.8934 against the loonie, from its early lows of 0.6681 and
0.8897, respectively. The aussie is seen finding resistance around
0.70 against the greenback and 0.945 against the loonie.
Reversing from its early lows of 1.0467 against the kiwi and
1.6328 against the euro, the aussie appreciated to more than a
2-month high of 1.0504 and more than a 2-week high of 1.6236,
respectively. The aussie is likely to find resistance around 1.07
against the kiwi and 1.60 against the euro.
The kiwi firmed to 0.6398 against the greenback, off early near
a 3-month low of 0.6378. On the upside, 0.65 is likely seen as the
next resistance for the currency.
The kiwi strengthened to a 4-day high of 1.7049 against the
euro, from a low of 1.7105 seen at 9:00 pm ET. If the kiwi
continues its rise, 1.68 is possibly seen as its next resistance
level.
The loonie advanced to near a 2-week high of 1.4503 against the
euro, reversing from a low of 1.4534 hit at 6:15 pm ET. Next key
resistance for the loonie is likely seen around the 1.44 level.
Having declined to 1.3320 against the greenback at 7:00 pm ET,
the loonie changed direction and edged up to 1.3295. The next
possible resistance for the loonie is seen around the 1.30
level.
The yen dropped to 4-day lows of 109.93 against the greenback,
82.69 against the loonie and 73.86 against the aussie, off its
early highs of 109.74, 82.38 and 73.32, respectively. The yen is
likely to find support around 111.00 against the greenback, 85.00
against the loonie and 75.00 against the aussie, if it declines
again.
The yen ticked down to 119.97 against the euro, 141.99 against
the pound and 112.36 against the franc, from its early highs of
119.71, 141.70 and 112.27, respectively. The yen may find support
around 122.00 against the euro, 144.00 against the pound and 114.00
against the franc.
Retreating from an early high of 70.00 against the kiwi, the yen
ticked down to 70.33. The yen is poised to challenge support around
the 72.00 area.
Looking ahead, U.K. GDP data for the fourth quarter and
industrial production, manufacturing production, construction
output and trade data, all for December, are due in the European
session.
European Central Bank President Christine Lagarde will deliver a
speech before the European Parliament in Strasbourg at 9:00 am
ET.
Federal Reserve Chair Jerome Powell testifies on the Semiannual
Monetary Policy Report before the House Financial Services
Committee in Washington DC at 10:00 am ET.
At 10:35 am ET, Bank of England Governor Mark Carney will
testify before the House of Lords Economic Affairs Committee in
London.
Federal Reserve Governor Randal Quarles will give a speech about
bank supervision at the Yale Law School Dean's Lecture in
Connecticut at 12:15 pm ET.
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