The Australian and the New Zealand dollars strengthened against their major opponents on Friday morning in Asia as a rally in most Asian stocks fueled investors’ risk appetite.
While the New Zealand dollar advanced to a weekly high against the Australian dollar and a 3-day high against the greenback, the aussie touched a 2-day high against the Canadian dollar.
Despite a weak close on Wall Street overnight, the Australian stock market is trading higher today. The benchmark S&P/ASX 200 index is currently trading at 4,620, up 25.9 points or 0.6% over its previous close. The broader All Ordinaries index is up 20.1 points or 0.4% at 4,635.
Among other markets in the Asia-Pacific region, Japan, Hong Kong, South Korea and Taiwan are trading firm, while Shanghai and Singapore are exhibiting weakness. Meanwhile, the New Zealand stocks are trading flat.
In economic news, the total amount of credit extended to private sector recipients in Australia increased 0.4 percent in January 2010 versus the preceding month, the Reserve Bank of Australia reported today. For the full year to January 2010, private sector credit increased 1.3 percent.
New Zealand’s trade balance swung to a surplus of NZ$269 million in January from the NZ$32 million deficit in the previous month, Statistics New Zealand reported today, marking the first trade surplus since May 2009. Analysts had expected a NZ$100 million deficit.
Exports dropped 0.6% annually to NZ$3.2 billion in January and imports plummeted 11.9% to NZ$2.9 billion.
The Australian dollar that slumped to new multi-day lows against the US dollar and the Japanese yen on Thursday reversed its direction in early Asian deals on Friday. The aussie advanced to 0.8911 against the greenback and 79.59 against the Japanese yen around 9:30 pm ET, compared to yesterday’s closing values of 0.8885 and 79.15, respectively. The Australian currency is currently quoted at 0.8904 against the buck and 79.54 against the yen.
The New Zealand dollar rose to a 3-day high of 0.6961 against the US dollar by 8:40 pm ET, compared to 0.6921 hit late New York Thursday. The kiwi-buck pair is presently worth 0.6940 with 0.7060 seen as the next upside target level.
Against the yen, the New Zealand dollar inched higher to 62.13 around 8:40 pm ET and the pair moved sideways thereafter. The kiwi-yen pair that closed yesterday’s deals at 61.66 is presently quoted at 62.0.
Japan’s industrial production, retail sales and the CPI reports released earlier in the day likely influenced the yen.
Industrial output in Japan climbed for the 11th consecutive month and was up a seasonally adjusted 2.5% on month in January, the Ministry of Economy, Trade and Industry said. That was sharply higher than analyst expectations for a 1% increase. On an annual basis, industrial production jumped 18.2%, topping forecasts for a 16.5% increase.
Retail sales in Japan climbed 2.6% in January compared to the previous year, according to another report from the same ministry. It was the first rise in 17 months and was sharply sharply higher than analyst expectations for a 0.2% decline.
Core consumer prices in Japan declined for the 11th straight month and were down 1.3% on year in January, the Ministry of Internal Affairs and Communications said. The February core inflation reading for Tokyo – considered a leading indicator of the nationwide trend – showed a 1.8% annual decline. The
overall inflation rate also was down 1.8%.
The Australian dollar that closed yesterday’s deals at 0.9428 against the Canadian dollar advanced to a 2-day high of 0.9440 by 8:40 pm ET. The aussie-loonie pair is currently quoted at 0.9427 and if the pair ticks up further, it may find resistance near the 0.9480 level.
The Australian dollar drifted higher to 1.5250 against the euro before showing choppy trend around 8:35 pm ET. The euro-aussie pair that closed yesterday’s deals at 1.5258 is presently quoted at 1.5276.
The New Zealand dollar edged higher to 1.9530 against the euro around 8:40 pm ET and this may be compared to yesterday’s close of 1.9598. The euro-kiwi pair is presently quoted at 1.9592.
Against the Australian dollar, the New Zealand currency climbed to a 1-week high of 1.2809 around 8:40 pm ET and the pair moved sideways thereafter. The aussie-kiwi pair, which finished Thursday’s North American deals at 1.2851, is presently worth 1.2830 with 1.2740 seen as the next likely target level.
Looking ahead, Japan is set to release its housing starts and construction orders data for January at 12:00 am ET.
From the euro-area, Italian Producer price index for January, German preliminary consumer price index for February and the euro-zone consumer price index for January are expected in the European session.
In the New York session, the U.S. preliminary fourth quarter Gross Domestic Product report, Chicago Purchasing Manager Index for February, University of Michigan’s final consumer confidence for February and existing home sales for January are expected to influence markets today.