Commodity currencies such as the Australian, New Zealand and Canadian dollars strengthened against their major counterparts in the Asian session on Tuesday following the overnight rebound in commodity prices.
Crude oil prices rose nearly 2 percent on Monday, rebounding from multi-year lows. Crude oil for January delivery are currently up $0.01 at $36.32 a barrel.
However, gains are muted as investors tread cautiously amid the volatility in crude oil prices and ahead of the U.S. Federal Reserve’s interest rate decision due on Wednesday. The Fed is widely expected to announce its first interest rate increase in nearly a decade.
The Australian dollar was also supported by minutes of the Reserve Bank of Australia’s December meeting released earlier today.
The minutes revealed that the members of the Reserve Bank of Australia’s monetary policy board are of the view that the country’s output growth should continue to pick up steam over the next two years. At the meeting, the bank kept its benchmark cash rate unchanged at 2.00 percent.
In other economic news, data from the Australian Bureau of Statistics showed that house prices in Australia were up 2.0 percent on quarter in the third quarter of 2015, in line with forecasts and slowing from 4.7 percent in the second quarter.
A separate report showed that total number of new motor vehicle sales in Australia was up a seasonally adjusted 1.0 percent on month in November, standing at 97,696. That follows the downwardly revised 3.7 percent contraction in October.
Monday, the aussie, kiwi and loonie were lower after crude oil prices tumbled last Friday to its worst closing level since February 2009.
The Australian dollar fell 0.83 percent against the U.S. dollar and 0.97 percent against the yen. The NZ dollar fell 0.67 percent against the U.S. dollar and 0.82 percent against the yen. Meanwhile, the Australian and the New Zealand dollars held steady against the euro.
Moreover, the Canadian dollar fell 0.17 percent against the U.S. dollar, 0.26 percent against the yen and 0.48 against the euro.
In the Asian trading, the Australian dollar rose to 4-day highs of 87.96 against the yen and 1.5148 against the euro, from yesterday’s closing quotes of 87.64 and 1.5162, respectively. If the aussie extends its uptrend, it is likely to find resistance around 90.00 against the yen and 1.49 against the euro.
The aussie climbed to a 5-day high of 0.7283, from yesterday’s closing value of 0.7243. The aussie may test resistance near the 0.74 region.
Against the Canadian dollar, the aussie advanced to 0.9962 from yesterday’s closing quote of 0.9942. On the upside, 1.00 is seen as the next resistance level for the aussie.
The NZ dollar rose to more than a 1-1/2-month high of 0.6796 against the U.S. dollar, from yesterday’s closing value of 0.6753. The kiwi is likely to find resistance around the 0.69 region.
Against the euro and the yen, the kiwi advanced to 4-day highs of 1.6191 and 82.28 from yesterday’s closing quotes of 1.6251 and 81.76, respectively. On the upside, 1.57 against the euro and 84.00 against the yen are seen as the next resistance levels for the kiwi.
The kiwi edged up to 1.0675 against the Australian dollar, from yesterday’s closing value of 1.0710. The next upside target level for the kiwi is seen around the 1.04 area.
The Canadian dollar rose to 1.5081 against the euro, from yesterday’s closing value of 1.5091. The loonie may test resistance around the 1.49 area.
Against the U.S. dollar and the yen, the loonie edged up to 1.3702 and 88.33 from yesterday’s closing quotes of 1.3733 and 88.12, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.35 against the greenback and 90.00 against the yen.
Looking ahead, Swiss producer and import prices for November, U.K. consumer price, producer price and retail price indices for November along with house price index for October and ZEW German economic sentiment index for December are due to be released later in the day.
In the New York session, Canada manufacturing sales data for October and existing home sales data for November, U.S. CPI data for November and U.S. NAHB housing market index for December are slated for release.
At 9:00 am ET, New Zealand GDT dairy auction is scheduled.
At 11:00 am ET, Bank of Canada releases the financial system review on the main risks to financial stability in Ottawa.
Following the release of the semi-annual Financial System Review, Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins are due to address a news conference.
U.S. Federal Reserve’s Federal Open Market Committee is set to kick start its two-day meeting on interest rates later today.
The material has been provided by InstaForex Company – www.instaforex.com