The Australian and the Canadian dollars strengthened against their major counterparts in the Asian session on Friday, tracking the overnight surge in crude oil prices and the gains on Wall Street after minutes of the latest Federal Reserve meeting reinforced the view that the central bank may delay its first interest rate hike into next year.
In the minutes, most officials decided it would be “prudent” to wait for signs that problems overseas, especially in China, would dissapate. The Fed voted 9 to 1 to hold rates steady.
The crude oil prices surged on upbeat demand growth outlook and after the Federal Reserve’s September meeting minutes hinted the central bank will keep interest rates near zero for the next few months. Crude oil for November delivery are currently up $0.25 to $49.68 a barrel.
Oil prices hit a three-month high on Thursday after PIRA Energy Group said a “new capital discipline” in the industry will allow demand to catch up with supplies and boost prices to $70 per barrel by the end of 2016.
In other economic news, data from the Australian Bureau of Statistics showed that the total number of home loans issued in Australia was up a seasonally adjusted 2.9 percent on month in August, coming in at 54,546. That missed forecasts for an increase of 4.7 percent following the downwardly revised 0.3 percent decline in July.
Thursday, the Australian dollar showed mixed performance against its major rivals. While the aussie rose against the greenback and the yen, it fell against the euro.
Meanwhile, the Canadian dollar fell 0.02 percent against the U.S. dollar, 0.26 percent against the yen and 0.34 percent against the euro.
In the Asian trading, the Australian dollar rose to more than a 3-week high of 87.28 against the yen and a 3-week high of 0.7276 against the U.S. dollar, from yesterday’s closing quotes of 87.06 and 0.7259, respectively. If the aussie extends its uptrend, it is likely to find resistance around 89.00 against the yen and 0.73 against the greenback.
Against the euro and the NZ dollar, the aussie advanced to more than a 1-1/2-month high of 1.5496 and a 2-day high of 1.0907 from yesterday’s closing quotes of 1.5529 and 1.0882, respectively. The aussie may test resistance near 1.51 against the euro and 1.10 against the kiwi.
The Canadian dollar rose to 2-day highs of 1.2976 against the U.S. dollar and 92.43 against the yen, from yesterday’s closing quotes of 1.3015 and 92.13, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.28 against the greenback and 95.00 against the yen.
Against the euro, the loonie advanced to a 2-day high of 1.4630 from yesterday’s closing value of 1.4675. The loonie may test resistance near the 1.43 region.
The loonie edged up to 0.9431 against the Australian dollar, from yesterday’s closing value of 0.9446. On the upside, 0.93 is seen as the next resistance level for the loonie.
Looking ahead, U.K. trade balance and construction output, both for August, are due to be released later in the day.
In the New York session, Canada unemployment rate for September, U.S. import price index for September and wholesale inventories for August are slated for release.
At 9:10 am ET, Federal Reserve Bank of Atlanta President Dennis Lockhart is expected to speak about the US economic outlook and monetary policy at the University of New York’s Graduate School of Journalism.
Subsequently, at 1:30 pm ET, Federal Reserve Bank of Chicago President Charles Evans will deliver a speech titled “A Perspective on Monetary Policy,” in Milwaukee.
The material has been provided by InstaForex Company – www.instaforex.com