Australian Dollar Gains As Rate Cut Speculation Eases
April 21 2015 - 11:53PM
RTTF2
The Australian dollar strengthened against the other major
currencies in the Asian session on Wednesday, as data showing a
bigger than expected increase in domestic consumer prices reduced
the possibility of Reserve Bank of Australia cutting rates in the
upcoming meeting.
Data from the Australian Bureau of Statistics showed that the
consumer prices in Australia were up 0.2 percent on quarter in the
first quarter of 2015. That was unchanged from the previous
quarter, although it was bigger than expectations for a 0.1 percent
increase.
On a yearly basis, inflation advanced 1.3 percent - in line with
forecasts and down from 1.7 percent in the previous three
months.
In other economic news, data from Westpac Bank and the Melbourne
Institute showed that the latest leading economic index of
Australia's economy is expected to slow through the remainder of
this year, sliding 0.3 percent in March. That follows the 0.3
percent increase in February.
Tuesday, the Australian dollar was trading lower, as the minutes
of RBA's April 7 meeting and the comments of RBA Governor Glenn
Steven late Monday signaled chances of a further rate cut in May's
meeting. However, the minutes showed that the bank is likely to
wait for more economic data before deciding on further interest
rate cut measures.
The Australian dollar fell 0.18 percent against the U.S. dollar,
0.23 percent against the yen, 0.15 percent against the euro and
0.31 percent against the NZ dollar on Tuesday.
In the Asian trading today, the Australian dollar rose to 2-day
highs of 92.99 against the yen and 1.3798 against the euro, from
yesterday's closing quotes of 92.24 and 1.3915, respectively. The
aussie may test resistance near 94.75 against the yen and 1.36
against the euro.
Against the U.S., the New Zealand and the Canadian dollars, the
aussie advanced to 2-day highs of 0.7772, 1.0113 and 0.9535 from
yesterday's closing quotes of 0.7709, 1.0045 and 0.9462,
respectively. If the aussie extends its uptrend, it is likely to
find resistance around 0.79 against the greenback, 1.03 against the
kiwi and 0.97 against the loonie.
Looking ahead, minutes of the Bank of England's latest monetary
policy meeting and Swiss ZEW economic expectation survey results
for April are due to be released in the European session.
In the New York session, U.S. house price index for April,
existing home sales for March and Eurozone consumer confidence
index for April are slated for release.
At 1:00 pm ET, German Bundesbank board member Andreas Dombret is
expected to speak on the current situation in the euro area in New
York.
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