The Antipodean currencies such as the Australia and the New Zealand dollars strengthened against their major currencies in the Asian session on Friday, as investor sentiment boosted after data showed the bigger-than-expected increase in U.S. consumer prices further offset optimism the U.S. Fed will continue to aggressively lower interest rates in the coming months. China is also falling as the markets await potential fiscal stimulus announcements on Saturday.
Following the data, Atlanta Fed President Raphael Bostic told the Wall Street Journal he was “definitely open” to leaving interest rates unchanged in November.
CME Group’s FedWatch Tool is currently indicating an 84.0 percent chance the Fed will lower rates by 25 basis points next month after slashing rates by 50 basis points last month.
Crude oil prices rose sharply as worries about escalating tensions in the Middle East outweighed uncertainty about the outlook for demand. West Texas Intermediate Crude oil futures for November ended higher by $2.61 or about 3.56 percent at $75.85 a barrel.
In the Asian trading today, the Australian dollar rose to a 4-day high of 1.6204 against the euro, from yesterday’s closing value of 1.6220. The aussie may test resistance around the 1.60 region.
Against the U.S. and the Canadian dollars, the aussie advanced to a 2-day high of 0.6750 and a 1-week high of 0.9283 from yesterday’s closing quotes of 0.6739 and 0.9266, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.69 against the greenback and 0.94 against the loonie.
The aussie edged up to 100.39 against the yen, from Thursday’s closing value of 100.25. On the upside, 103.00 is seen as the next resistance level for the aussie.
The NZ dollar rose to 2-day highs of 0.6106 against the euro and 1.7913 against the euro, from yesterday’s closing quotes of 0.6092 and 1.7937, respectively. If the kiwi extends its uptrend, it is likely to resistance around 0.63 against the greenback and 1.77 against the euro.
Against the Australia and the yen, the kiwi edged up to 1.1044 and 90.79 from Thursday’s closing quotes of 1.1058 and 90.65, respectively. The next possible upside target for the kiwi is seen around 1.09 against the aussie and 93.00 against the yen.
Looking ahead, Canada jobs data for September, U.S. PPI for September, U.S. University of Michigan’s consumer sentiment for October, U.S. WASDE report and U.S. weekly Baker Hughes oil rig count data are slated for release in the New York session.
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