The Australian dollar, which slumped to multi-day lows against most majors on Tuesday after China tightened its monetary policy, edged slightly higher on Wednesday morning in Asia despite a drop in regional shares.
The Australian stock market is trading weak today with the overnight negative close on Wall Street and lower oil and metal prices hurting sentiment to a notable extent. The benchmark S&P/ASX 200 index, which declined to 4,852.9, is currently trading at 4,868, down 31.5 points or 0.6% from its previous close. The broader All Ordinaries index is down 32.6 points or 0.7% at 4,899.
Yesterday, the Chinese central bank announced that it is raising the yuan deposit reserve ratio for banks. In a statement on its website, the People’s Bank of China said it is increasing the yuan deposit reserve ratio for banks by 50 basis points. The hike is set to take effect on January 18.
The Australian dollar that closed Tuesday’s North American deals at 0.9202 against the greenback advanced to 0.9238 by 9:45 pm ET. This was up by more than 0.7 percent from yesterday’s 4-day low of 0.9173. On the upside, resistance is likely to be seen around the 0.93 level. The aussie-buck pair is currently quoted at 0.9225.
The Commerce Department said on Tuesday that the U.S. trade deficit widened to $36.4 billion in November from a revised $33.2 billion in October. Economists had expected the deficit to widen to $34.6 billion from the $32.9 billion originally reported for the previous month.
The Australian dollar that edged higher to 84.26 against the Japanese yen around 7:40 pm ET saw choppy thereafter. The aussie-yen pair is presently worth 84.0, compared to 83.73 hit late New York Tuesday.
Japan will provide December figures for bankruptcies and machine tool orders. Bankruptcies were down 11.4 percent on year in November, while machine tool orders fell an annual 8.4 percent in the previous month.
The Australian dollar that advanced to 1.2494 against the New Zealand dollar around 8:50 pm ET started reversing its course thereafter. The aussie-kiwi pair is presently trading near Tuesday’s North American session closing value of 1.2469.
The aussie climbed to 1.5687 against the euro around 9:40 pm ET, up by more than 0.7 percent from yesterday’s 1-week low of 1.5801. The euro-aussie pair that was worth 1.5752 at Tuesday’s New York session close is currently quoted at 1.5704.
The French consumer price index for December and current account for November, Italian and the euro-zone industrial production for November, which are due out in the upcoming European session may influence markets today.
Looking forward to the North American session, the markets may focus on a speech from Chicago Federal Reserve President Charles Evans, who will make remarks on the economy and monetary policy.
At 2:00 pm ET, the Fed’s Beige Book report is due, which is summarizing the latest economic conditions from each of the 12 Federal Reserve districts.