Commodity Currencies Rise, Focus On U.S. CPI Data, Fed Meeting
June 12 2024 - 1:13AM
RTTF2
The commodity currencies such as Australia, the New Zealand and
the Canadian dollars strengthened most major currencies in the
Asian session on Wednesday, as traders await the U.S. inflation
report and the Federal Reserve decision later in the day.
Economists expect consumer prices to inch up by 0.1 percent in
May after climbing by 0.3 percent in April, while core consumer
prices, which exclude food and energy prices, are expected to
increase by 0.3 percent for the second straight month.
The annual rate of growth by consumer prices is expected to come
in unchanged at 3.4 percent, but the annual rate of core consumer
price growth is expected to slow to 3.5 percent in May from 3.6
percent in April.
The U.S. central bank is widely expected to leave interest rates
unchanged, but traders will pay close attention to the accompanying
statement as well as officials' latest projections for the economy
and interest rates. Crude oil prices settled slightly higher, as
caution reigned ahead of inventory data and the Federal Reserve's
monetary policy announcement. West Texas Intermediate crude oil
futures for July ended up by $0.16 at $77.90 a barrel.
In economic news, data from the National Bureau of Statistics
showed that the consumer prices in China were up 0.3 percent on
year in May. That was shy of expectations for 0.4 percent and
unchanged from the previous month.
On a monthly basis, inflation fell 0.1 percent versus forecasts
for a flat reading after rising 0.1 percent in April.
The bureau also said that producer prices slumped an annual 1.4
percent - exceeding forecasts for -1.5 percent following the 2.5
percent decline a month earlier.
In the Asian trading today, the Australian dollar rose to more
than a 3-week high of 1.6220 against the euro and an 8-day high of
104.13 against the yen, from yesterday's closing quotes of 1.6259
and 103.81, respectively. If the aussie extends its uptrend, it is
likely to find resistance around 1.61 against the euro and 106.00
against the yen.
Against the U.S. and the Canadian dollar, the aussie advanced to
5-day highs of 0.6622 and 0.9103 from Tuesday's closing quotes of
0.6606 and 0.9088, respectively. The aussie may test resistance
around 0.68 against the greenback and 0.92 against the loonie.
The aussie edged up to 1.0770 against the NZ dollar, from
yesterday's closing value of 1.0752. On the upside, 1.08 is seen as
the next resistance level for the aussie.
The NZ dollar rose to a 6-day high of 96.69 against the yen and
nearly a 4-month high of 1.7468 against the euro, from yesterday's
closing quotes of 96.54 and 1.7482, respectively. If the kiwi
extends its uptrend, it is likely to find resistance around 98.00
against the yen and 1.73 against the euro.
Against the U.S. dollar, the kiwi edged up to 0.6149 from an
early low of 0.6134. The next possible upside target for the kiwi
is seen around the 0.62 area.
The Canadian dollar rose to an 8-day high of 114.43 against the
yen and a 5-day high of 1.3742 against the U.S. dollar, from
yesterday's closing quotes of 114.16 and 1.3758, respectively. If
the loonie extends its uptrend, it is likely to find resistance
117.00 against the yen and 1.35 against the greenback.
Against the euro, the loonie edged up to 1.4764 from Tuesday's
closing value of 1.4776. On the upside, 1.45 is seen as the next
resistance level for the euro.
Looking ahead, the National Institute of Economic and Social
Research will publish U.K. monthly GDP tracker at 6.00 am ET.
In the New York session, U.S. mortgage approvals data, CPI data
for May, U.S. EIA crude oil data and U.S. Federal Reserve's monthly
budget statement are slated for release.
At 2:00 pm ET, the U.S. Federal Reserve will announce its
monetary policy decision. The central bank is expected to keep
interest rates unchanged at 5.50 percent.
Half-an-hour later, the U.S. Federal Reserve chairman Jerome
Powell will conduct a press conference.
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