Antipodean Currencies Extend Gain Amid Rising Risk Appetite

22:03, 30th June 2016

(RTTNews) - Antipodean currencies such as the Australian and the New Zealand dollars continued to be strong against their major counterparts in the Asian session on Friday amid improved risk appetite as stocks continued to rebound from the sell-off in reaction to the shock Brexit vote.

Optimism about more stimulus from central banks, including the Bank of England, lifted investor sentiment. Overnight in a public speech, Bank of England Governor Mark Carney hinted at providing further stimulus following Britain's vote to leave the European Union.

Meanwhile, crude oil price rose on bullish price expectations, premised on a tighter market. Crude oil for August delivery are currently up $0.30 to $48.63 a barrel.

In other economic news, data from the Australian Industry Group showed that the manufacturing sector in Australia continued to expand in June, and at an accelerated pace, with a Performance of Manufacturing Index score of 51.8. That's up from 51.0 in May.

Data from the National Bureau of Statistics showed that the manufacturing sector in China was steady in June, with a manufacturing PMI score of 50.0. That was in line with expectations, and down slightly from 50.1 in May.

The bureau also said that the non-manufacturing PMI came in with a score of 53.7, up from 53.1 in the previous month.

Data from Caixin showed that the manufacturing sector in China contracted for the 16th straight month in June, with a manufacturing PMI score of 48.6. That was well shy of forecasts for 49.2, which would have been unchanged from the May reading.

Thursday, the Australian and the New Zealand dollars rose against their major rivals. The aussie rose 0.21 percent against the U.S. dollar, 0.48 percent against the yen and 0.16 percent against the euro. The kiwi rose 0.02 percent against the U.S. dollar, 0.62 percent against the yen and 0.49 percent against the euro.

In the Asian trading, the Australian dollar rose to 76.82 against the yen, from an early low of 76.54. The aussie may test resistance around the 82.00 area.

Against the U.S. dollar, the euro and the Canadian dollar, the aussie edged up to 0.7468, 1.4860 and 0.9671 from yesterday's closing quotes of 0.7450, 1.4901 and 0.9625, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.77 against the greenback, 1.45 against the euro and 0.99 against the loonie.

The NZ dollar rose to a 1-week high of 0.7157 against the U.S. dollar, from yesterday's closing value of 0.7129. The kiwi may test resistance near the 0.73 area.

Against the euro and the yen, the kiwi edged up to 1.5505 and 73.63 from yesterday's closing quotes of 1.5557 and 73.55, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 1.54 against the euro and 78.00 against the yen.

The kiwi edged up to 1.0429 against the Australian dollar, from yesterday's closing value of 1.0437. This may be compared to an early 1-week high of 1.0422. On the upside, 1.03 is seen as the next resistance level for the kiwi. Looking ahead, Swiss retail sales data for May, PMI reports from major European economies for June and Eurozone unemployment rate for May are due to be released later in the day.

At 3:15 am ET, European Central Bank board member Benoit Coeure participates in a round table discussion on the occasion of the 60th anniversary of Paris Club.

At 4:30 am ET, Austrian central bank releases its financial stability report, followed by Governor and European Central Bank board member Ewald Nowotny's press conference in Vienna.

At 6:00 am ET, European Central Bank Chief Economist Peter Praet is expected to speak at Financial Times "Festival of Finance" in London. Later, Bank of England Chief Economist Andy Haldane will also talk about "cashless society" in the same venue.

In the New York session, final U.S. manufacturing PMI for June, construction spending data for May and U.S. Baker Hughes weekly rig count data are slated for release.

At 11:00 am ET, Federal Reserve Bank of Cleveland President Loretta Mester is expected to speak on the economic outlook and monetary policy before the European Economics Financial Centre Distinguished Speakers Seminar in London.