The Australian and the New Zealand dollars strengthened against their major counterparts in the Asian session on Wednesday amid rising risk appetite, as investors resorted to bargain hunting, following the steep losses in the previous session.
In addition, the strong gains overnight by the shares of commodities trader and miner Glencore, which has rejected fears that it would not be able to withstand falling commodity prices, also boosted sentiment.
However, buying interest remained relatively subdued amid continued uncertainty about the outlook for U.S. interest rates and the global economy.
Traders focus on Federal Reserve Chair Janet Yellen’s speech at a conference later today.
In other economic news, the Australian Bureau of Statistics said the total number of building approvals issued in Australia was down a seasonally adjusted 6.9 percent in August, coming in at 18,701. That missed forecasts for a decline of 2.0 percent following the upwardly revised 7.9 percent increase in July.
On a yearly basis, approvals gained 5.1 percent, also shy of expectations for 7.4 percent, following the upwardly revised 17.9 percent surge in the previous month.
The Reserve Bank of Australia said that the total value of private sector credit was up 0.6 percent on month in August, above expectations for a gain of 0.5 percent and unchanged from the previous month. On a yearly basis, credit climbed 6.3 percent, beating forecasts for 6.2 percent, and up from 6.1 percent in July.
Data from Statistics New Zealand that the total number of building permits issued in New Zealand was down a seasonally adjusted 4.9 percent on month in August, standing at 2,291. That follows the downwardly revised 20.3 percent surge in July.
Tuesday, the Australian and the New Zealand dollars weakened against their major rivals amid risk aversion, tracking the weak cues from the U.S. and European markets as well as lower commodity prices amid worries about the health of China’s economy.
The Australian dollar fell 0.12 percent against the U.S. dollar, 0.22 percent against the yen and 0.98 percent against the euro. The NZ dollar fell 0.28 percent against the U.S. dollar, 0.17 percent against the yen and 0.74 percent against the euro.
In the Asian trading, the Australian dollar rose to an 8-day high of 0.9421 against the Canadian dollar, from yesterday’s closing value of 0.9372. The aussie may test resistance near the 0.95 region.
Against the U.S. and the New Zealand dollars, the aussie advanced to 0.7020 and 1.1032 from yesterday’s closing quotes of 0.6980 and 1.0995, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.71 against the greenback and 1.11 against the kiwi.
The aussie edged up to 84.21 against the yen and 1.6029 against the euro from yesterday’s closing quotes of 83.60 and 1.6097, respectively. On the upside, 86.00 against the yen and 1.56 against the euro are seen as the next resistance levels for the aussie.
The NZ dollar rose to 0.6376 against the U.S. dollar and 76.49 against the yen, from yesterday’s closing quotes of 0.6345 and 75.98, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.65 against the greenback and 78.00 against the yen.
Against the euro, the kiwi edged up to 1.7643 from yesterday’s closing value of 1.7721. The kiwi may find resistance near the 1.73 a area.
Meanwhile, the safe-haven yen fell against its major rivals amid rising risk appetite.
In other economic news, industrial output in Japan fell a seasonally adjusted 0.5 percent on month in August, the Ministry of Economy, Trade and Industry or METI said. That was well shy of forecasts for an increase of 1.0 percent following the 0.8 percent decline in July.
On a yearly basis, industrial production added just 0.2 percent, also below expectations for a gain of 1.8 percent following the flat reading in the previous month.
Also, the METI said that retail sales in Japan were up 0.8 percent on year in August. That missed expectations for an increase of 1.2 percent, following the 1.8 percent jump in July.
In the Asian trading, the yen fell to a 5-day low of 135.11 against the euro, from yesterday’s closing value of 134.68. The yen may test support near the 137.50 area,
The yen slid to 181.89 against the pound and 123.57 against the Swiss franc, from yesterday’s closing quotes of 181.39 and 123.12, respectively. If the yen extends its downtrend, it is likely to find support 184.00 against the pound and 125.00 against the franc.
Against the U.S.and the Canadian dollars, the yen dropped to 120.04, and 89.43 from yesterday’s closing quotes of 119.73 and 89.20, respectively. On the downside, 122.00 against the greenback and 90.50 against the loonie are seen as the next support levels for the yen.
Looking ahead, Swiss UBS consumption indicator and German retail sales data, both for August, and U.K. Nationwide house price index for September are slated for release in the pre-European session at 2:00 am ET.
In the European session, Swiss KOF leading indicator for September, the German unemployment data for September, U.K. final GDP data for the second quarter, Eurozone flash CPI for September and unemployment rate for August are set to be announced.
In the New York session, U.S. private sector jobs data for September, U.S. weekly crude oil inventories report for the week ended September 25 and U.S. Chicago PMI for September and Canada GDP data for July are set to be announced.
At 8:00 am ET, Federal Reserve Bank of New York President William Dudley is expected to speak at the Securities Industry and Financial Markets Association’s Liquidity Forum, in New York.
Subsequently, Federal Reserve Chair Janet Yellen will deliver opening remarks at the Federal Reserves’ annual community banking conference, in St. Louis at 3:00 pm ET.
The material has been provided by InstaForex Company – www.instaforex.com