Aussie holds 0.94 US in the Asian session
The Australian dollar was trading above 0.94 US Friday, as a dearth of economic data kept pressure on the greenback.
The AUDUSD was trading at 0.94 in Friday’s early Asian session. The pair on Thursday reached an intraday high of 0.9429. The trend line shows support at 0.9347, right around the 20-day average (0.9345). Resistance is likely found at 0.9441.
As of Friday, the AUDUSD was poised to break even for the week, having retraced its intraweek losses.
The US dollar fell swiftly Wednesday after the Federal Reserve signaled interest rates would remain at record lows for an extended period. The Fed downgraded its forecast for 2014 and predicted long-run interest rates to trend below the historical average of 4 percent. This suggests policymakers won’t rush to raise interest rates during the recovery.
Nevertheless, the Federal Reserve felt compelled to taper bond purchasing by another $10 billion to $35 billion in July, citing improvements to the labour market.
The benchmark lending rate was left at 0.25 percent, as expected.
Since Wednesday, the US dollar index has declined 0.4 percent. The index was at 80.32 in the early Asian session.
The Reserve Bank of Australia downplayed foreign home ownership in its quarterly Bulletin on Thursday. The RBA said foreign investors have boosted the country’s housing supply rather than make houses too expensive for nationals. Housing affordability is a growing concern in Australia. These concerns were vindicated last week after the International Monetary Fund said Australian homes are among the most expensive in the world.
On Tuesday the RBA indicated interest rates are likely to hold steady as the economy continues to recover from a slowdown in mining investment, the minutes of the June RBA policy meetings showed.
The Australian government’s 2014 budget, which has been described as the toughest in nearly two decades, will also weigh on recovery efforts as policymakers seek to balance the country’s finances.
Australia has a quiet release schedule Friday, which will likely keep the AUDUSD elevated as the forex market continues to speculate about US monetary policy.
In other trading, the Aussie snapped a three-day losing streak against the New Zealand dollar. That streak cost the AUDNZD 0.4 percent.
The AUDNZD was trading at 1.0795, advancing 0.11 percent. Initial support is likely found at 1.0747 and resistance at 1.0792, slightly below the 100-day average of 1.0795.
New Zealand’s economy expanded 1 percent in the first quarter, Statistics New Zealand confirmed Thursday. Economists forecast a quarterly gain of 1.2 percent.
Year-on-year, the economy expanded 3.8 percent, exceeding forecasts that called for 3.7 percent.
The AUDJPY was holding steady at 95.80. The pair faces initial support at 95.48 and resistance at 96.15.
In economic data Japan’s all industry activity index declined from 1.5 percent to -4.3 percent, the Ministry of Economy, Trade and Industry reported Thursday.
Sorry. No data so far.