Wednesday in Asia, the Australian dollar extended its previous sessions’ uptrend against most majors as a rally in most Asian stocks and the Reserve Bank of Australia’s 0.25% hike on interest rate yesterday prompted traders to hold positions in riskier assets.
The Australian currency rose to a fresh record high against the euro and a new multi-month high against the yen.
The Australian stock market is trading modestly higher today with investors indulging in some selective buying following a positive close on Wall Street overnight. The benchmark S&P/ASX 200 index is currently trading at 4,964, up 10.3 points or 0.2% over its previous close. The broader All Ordinaries index is up 10.9 points or 0.2% at 4,985.
Among other markets in the Asia-Pacific region, New Zealand and Singapore are trading higher, while Malaysia, Japan and South Korea are trading weak.
On the economic front, activity in Australia’s services sector remained weak in March, according to the latest survey from the Australian Industry Group and Commonwealth Bank. Their Performance Of Services Index for March shows a reading of 48.4 for March, a minor improvement from the February reading of 48.3. The sales, new orders and supplier deliveries categories all declined in March, AIG said.
The Australian dollar rose to 87.55 against the Japanese yen at 10:40 pm ET and this set the highest level for the pair since late September, 2008. The next upside target for the aussie-yen pair is seen around the 89.50 level. The pair that was worth 87.10 at Tuesday’s North American session close is currently quoted at 87.40.
The yen was little changed after the policy board of the Bank of Japan unanimously decided to retain the overnight call rate at 0.10%, in line with market expectations.
Hovering near yesterday’s multi-month high, the Australian dollar advanced to 0.9290 against the US dollar by 10:40 pm ET Tuesday. On the upside, the domestic currency may find resistance around the 0.9330 level. The aussie-greenback pair is presently worth near Tuesday’s North American session closing value of 0.9285.
The Australian dollar that closed yesterday’s deals at 1.3149 against the NZ dollar moved mostly sideways on Wednesday morning in Asia. The aussie-kiwi pair traded in a range between 1.3175 and 1.3135 and the pair is presently quoted at 1.3160.
Against the Canadian dollar, the Australian currency declined to 0.9272 by 9:30 pm ET and the pair leveled off thereafter. The aussie-loonie pair that closed Tuesday’s New York session at 0.9302 is presently quoted at 0.9278.
Against the common currency of Europe, the Australian dollar touched a new record high of 1.4413 around 10:40 pm ET Tuesday. The euro-aussie pair is presently trading near Tuesday’s North American session closing value of 1.4437.
In the upcoming European session, final services PMI reports for March from the major European economies, Euro-zone February PPI and the final fourth quarter GDP, German February factory orders are expected to influence trading.
Across the Atlantic, markets are likely to focus on comments from Federal Reserve Chairman Ben Bernanke on economic challenges.
Canada’s February building permits and March Ivey PMI are also due out in the North American session.
The U.S. Federal Reserve is expected to release its monthly consumer credit report at 3 pm ET.