Friday in Asia, the Australian and New Zealand dollars gained ground as most Asian stocks trimmed their earlier losses, restoring some confidence among investors to buy higher-yielding assets.
However, both the currencies pared some of their gains after the Asian bourses returned into the negative territory as investors are cautious ahead of the vital U.S. jobs figures due later in the day.
Before paring gains in late trading, Australia’s S&P/ASX 200 was up 0.33%, New Zealand’s NZX-50 climbed 0.47%, Japan’s Nikkei Stock Average rose 0.47%, South Korea’s Kospi Composite jumped 0.42% and Taiwan’s Weighted average advanced 1.19%.
The Australian dollar climbed to a 2-day high of 0.8512 against the US dollar and 75.07 against the Japanese yen before reversing its course around 10:20 pm ET. The aussie that closed yesterday’s deals at 0.8434 against the greenback and 73.89 versus the yen is presently quoted at 0.8478 and 74.58, respectively. At present, the Australian currency is trading at 0.8478 against the greenback and 74.58 against the yen.
Traders reacted to Thursday’s disappointing U.S. economic data, with the Institute for Supply Management saying its index of manufacturing activity dropped to 56.2 for June from May’s reading of 59.7. The extent of the drop surprised economists, who had expected the figure to show a much more modest decline to a reading of 59.
At the same time, May’s pending home sales from the National Association of Realtors plummeted by 30.0 percent in May and the Labor Department’s initial jobless claims rose to 472,000 from the previous week’s revised upwardly figure of 459,000.
Monetary base in Japan was up 3.6 percent on year in June, the Bank of Japan said today, coming in at 97.024 trillion yen. That follows a 3.7 percent annual increase in May. Seasonally adjusted, the monetary base was down 1.6 percent in June to 97.346 trillion yen.
The Australian dollar advanced to a 2-day high of 0.8993 against the Canadian dollar by 11:40 pm ET, compared to yesterday’s close of 0.8938. The aussie-loonie pair is presently worth 0.8976 with 0.9115 seen as the next likely resistance level.
The Australian currency rose to as high as 1.4718 against the euro before reversing its direction slightly around 10:20 pm ET. The euro-aussie pair that was worth 1.4862 at Thursday’s close is currently quoted at 1.4774.
The New Zealand dollar advanced to a 3-day high of 0.6969 against the greenback and a 2-day high of 61.47 against the Japanese yen around 10:20 pm ET. Thereafter, the domestic unit reversed its uptrend slightly in late trading and is currently quoted at 0.6934 against the greenback and 60.99 versus the yen. At Thursday’s close, the NZ dollar was worth 0.6909 against the greenback and 60.54 versus the yen.
The New Zealand dollar reached as high as 1.2208 against the Australian dollar at this time and thus challenged yesterday’s new multi-week high of 1.2202. The aussie-kiwi pair that was worth 1.2221 at Thursday’s close is currently quoted at 1.2236.
The New Zealand dollar pulled back after edging up to 1.7987 against the euro in Asian trading. The euro-aussie pair, which ended yesterday’s deals at 1.8152, is presently quoted at 1.8076.
Looking ahead, euro-zone’s producer price index and unemployment rate and Italy’s unemployment rate-all for the month of May are expected in the upcoming European session.
Turning to the North American session, all eyes will be on the U.S. non-farm payroll employment report for June. Economists estimate that the U.S. economy lost 100,000 jobs in June and expect the unemployment rate to edge up to 9.8%.
Commerce Department’s data on factory goods orders may also garner attention after the employment report. Orders for manufactured goods are likely to have fallen 0.7% in May.