Australian, NZ Dollars Advance On UK Policy U-turn
The Australian and NZ dollars climbed against their major
counterparts in the Asian session on Tuesday, as a dramatic U-turn
in British fiscal policy lifted risk sentiment.
Investors cheered British finance minister Jereme Hunt's
decision to scrap most of the policies announced in the mini-budget
"We remain completely committed to our mission to go for growth,
but growth requires confidence and stability - which is why we are
taking many difficult decisions, starting today," Hunt said in a
speech to the House of Commons.
British Prime Minister Liz Truss has apologized for the
tumultuous first few weeks of her leadership, but insisted she is
going nowhere and would lead the Conservative Party into the next
In economic news, minutes from the Reserve Bank of Australia's
October 4 meeting showed that members agreed that it was necessary
to again hike its benchmark lending rate in the face of soaring
At the meeting, the RBA raised its benchmark rate by a
quarter-point - lifting the cash rate target by 25 basis points to
2.60 percent from 2.35 percent. This was the highest rate since
mid-2013. The board also increased the interest rate on exchange
settlement balances by 25 basis points to 2.50 percent.
Data from Statistics New Zealand showed that New Zealand
consumer prices were up 7.2 percent on year in the third quarter of
That exceeded estimates for an increase of 6.6 percent and eased
slightly from 7.3 percent in the previous three months.
The aussie climbed to a 4-day high of 0.6331 against the
greenback and near a 2-week high of 94.17 against the yen,
reversing from its early lows of 0.6277 and 93.46, respectively.
The aussie is seen facing resistance around 0.685 against the
greenback and 98.00 against the yen.
The aussie rose back to 0.8651 against the loonie, from a low of
0.8617 hit at 5:15 pm ET. Next immediate resistance for the aussie
is seen around the 0.90 level.
In contrast, the aussie remained lower against the euro, with
the pair trading at 1.5653. The next possible support for the
currency is seen around the 1.61 level.
The kiwi appreciated to near a 2-week high of 0.5704 against the
greenback and near a 4-week high of 84.88 against the yen,
following its previous lows of 0.5623 and 83.83, respectively. The
kiwi may challenge resistance around 0.62 against the greenback and
87.00 against the yen.
Recovering from its prior lows of 1.7468 against the euro and
1.1165 against the aussie, the kiwi firmed to a 4-day high of
1.7283 and near a 2-month high of 1.1073, respectively. Should the
kiwi strengthens further, it is likely to test resistance around
1.68 against the euro and 1.09 against the aussie.
Looking ahead, German ZEW economic sentiment for October is set
for release in the European session.
At 8:15 am ET, Canada housing starts for September are scheduled
U.S. industrial production for September and NAHB housing market
index for October will be out in the New York session.
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