Australian Dollar Strengthens After Strong In…

January 29, 2020

The Australian dollar appreciated against its major counterparts in the Asian session on Wednesday, as a data showed that the nation’s consumer inflation beat expectations on year in the fourth quarter.

Data from the Australian Bureau of Statistics showed that inflation gained 1.8 percent on an annual basis.

That topped forecasts for 1.7 percent, which would have been unchanged from the Q3 reading.

Consumer prices advanced 0.7 percent on quarter in the fourth quarter of 2019. That beat expectations for a gain of 0.6 percent and was up from 0.5 percent in the three months prior.

Asian stock markets were mostly higher following the overnight rebound on Wall Street. Nevertheless, investors remained cautious as they kept an eye on developments related to the coronavirus outbreak in China. According to Chinese health officials, the coronavirus outbreak has killed 132 people and infected 5,974 people.

The aussie climbed to 2-day highs of 0.6777 against the greenback and 74.01 against the yen, from its early lows of 0.6755 and 73.69, respectively. The next possible resistance for the aussie is seen around 0.71 against the greenback and 76.5 against the yen.

The aussie rose to a 2-day high of 1.6250 against the euro and a 6-day high of 1.0370 against the kiwi, off its early low of 1.6315 and a 2-day low of 1.0315, respectively. On the upside, 1.60 and 1.05 are likely seen as the next resistance levels for the aussie against the euro and the kiwi, respectively.

Reversing from its early low of 0.8891 against the loonie, the aussie edged up to 0.8919. If the aussie rises further, 0.91 is seen as its next resistance level.

Looking ahead, Swiss economic sentiment index for January and Eurozone money supply for December are scheduled for release in the European session.

U.S. wholesale inventories, advance goods trade data and pending home sales for December are due in the New York session.

The Federal Reserve announces its interest rate decision at 2:00 pm ET. Economists widely expect the central bank to keep benchmark rate in a range of 1.50 percent to 1.75 percent.


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