Australian, NZ Dollars Higher On Fed's Soothing Comments
May 24 2021 - 11:59PM
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The Australian and NZ dollars climbed against their major
counterparts in the Asian session on Tuesday, as inflation worries
receded following comments from Fed officials indicating continued
policy support and considering the pick up in inflation to be
transitory.
Most Asian stock markets rose, following the broadly positive
cues overnight from Wall Street, as Fed officials talked down
inflation risks and described the recent demand-supply disruptions
as transitory.
Fed officials Lael Brainard, Raphael Bostic and James Bullard
suggested that supply bottlenecks could lead to higher prices in
coming months but the spike should be temporary.
Treasury yields were stable following a retreat overnight on the
Fed comments.
Data from Statistics New Zealand showed that New Zealand retail
sales climbed a seasonally adjusted 2.5 percent on quarter in the
first quarter of 2021 - following the upwardly revised 2.6 percent
contraction in the three months prior (originally -2.7
percent).
On a yearly basis, sales rose 6.8 percent - accelerating from
4.8 percent in the three months prior.
The aussie climbed to 4-day highs of 0.7776 against the
greenback and 84.47 against the yen, after falling to 0.7746 and
84.25, respectively in early deals. The next possible resistance
for the aussie is seen around 0.80 against the greenback and 86.00
against the yen.
Reversing from its early lows of 1.5780 against the euro and
0.9332 against the loonie, the aussie gained to 4-day highs of
1.5740 and 0.9359, respectively. If the aussie rises further, it
may find resistance around 1.54 against the euro and 0.96 against
the loonie.
The aussie rebounded from an early 8-day low of 1.0732 against
the kiwi and edged up to 1.0751. The aussie is likely to challenge
resistance around the 1.09 level.
The kiwi appreciated to a 4-day high of 1.6905 against the euro
and 6-day highs of 0.7240 against the greenback and 78.69 against
the yen, off its prior lows of 1.6952, 0.7203 and 78.32,
respectively. The kiwi is poised to find resistance around 1.66
against the euro, 0.74 against the greenback and 80.00 against the
yen.
Looking ahead, German Ifo business sentiment index for May is
due in the European session.
U.S. consumer confidence index for May, new home sales for April
and FHFA's house price index and S&P/Case-Shiller home price
index for March will be out in the New York session.
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