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Aussie and New Zealand dollar rally amid Fed decision

The Aussie and New Zealand dollar edged up against their major counterparts in the Asian session on Thursday amid risk appetite. The Federal Reserve has pledged to maintain a super soft policy. President Joe Biden outlined ambitious plans to build America by offering $ 1.8 trillion in education and healthcare spending.

The Fed left interest rates and the asset purchase program unchanged, but acknowledged the improvement in the economy.

The Fed said the rise in inflation was temporary and would allow inflation to exceed its 2% target before considering raising rates.

In his first address to Congress, Biden unveiled a $ 1.8 trillion spending plan for education, childcare and other government services.

The package will be financed in part by raising taxes for wealthy Americans.

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The Australian Bureau of Statistics showed that Australian export prices jumped 11.2% in the first quarter of 2021 after rising 5.5% in the fourth quarter.

Import prices rose 0.2% in the fourth quarter, following a 1.0% decline in the fourth quarter and the first rise in import prices since the fourth quarter of 2019.

On an annualized basis, export prices rose 8.6% and import prices fell 6.2% as the exchange rate weighed down on prices.

The Australian dollar climbed to 6-week highs of 0.7818 against the greenback and 84.81 against the yen from early lows of 0.7782 and 84.49, respectively. The Australian dollar is likely to meet resistance at 0.80 against the US dollar and 87.00 against the yen.

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The Australian dollar rose to 1.0743 against the NZ dollar after falling to 1.0715 at 5 pm ET. The Australian dollar is likely to meet resistance around 1.10.

The Aussie was down to 0.9577 against the Canadian dollar and 1.5590 against the euro, rebounding from early highs of 0.9607 and 2-day highs of 1.5537, respectively. The next key support level for the Aussie is likely to be seen at 0.94 against the Canadian dollar and 1.60 against the euro.

The New Zealand dollar jumped to a nearly 2-month high of 0.7287 against the US dollar and a 6-week high of 79.04 against the yen from previous lows of 0.7247 and 78.73, respectively. The New Zealand dollar may meet resistance at 0.74 against the US dollar and 80.00 against the yen.

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The New Zealand dollar, however, reversed from an early 8-day high of 1.6671 against the euro and fell to 1.6732. If the NZ dollar falls further, the 1.69 mark is likely to be seen as its next support level.

The data on the unemployment rate in Germany and the index of economic confidence in the eurozone for April will be presented at the European session.

At 8:00 am ET, preliminary data on German consumer inflation for April is due out.

US GDP data for the first quarter, weekly jobless claims for the week ending April 24, and pending home sales for March are due in the US session.

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