News Column

Australian Dollar Advances Against Majors

July 13, 2014

CANBERA (Alliance News) - The Australian dollar climbed against the other major currencies in Asian deals on Monday, as sentiment improved after concerns over soundness of banking sector in Portugal faded, and traders await testimony on monetary policy by Fed Chair Janet Yellen and European Central Bank President Mario Draghi due this week.

Concerns over Portugal's Banco Espirito had eased after the country's central bank on Friday gave assurance that the lender could fulfill its capital requirements.

Yen will deliver semiannual testimony before the Senate Banking Committee and House Financial Services Committee on Tuesday and Wednesday, respectively. Yellen is expected to provide outlook on the economy, and also discuss exit strategy of accommodative monetary policies.

Mario Draghi will testify on monetary policy to the Committee on Economic and Monetary Affairs of the European Parliament later in the day. His speech will be closely watched for more details about the central bank's work on asset purchase program.

After falling to a 4-day low of 0.9373 against the greenback in early deals, the aussie rose to 0.9400. The pair finished last week's deals at 0.9384. On the upside, 0.95 is seen as next resistance level for the aussie.

The aussie hit 1.0095 against the loonie, which is its highest level since July 2, off an early low of 1.0060. At last week's close, the pair was worth 1.0072. The next possible upside target for the aussie is seen around the 1.015 level.

Having fallen to 95.03 against the yen earlier, the aussie climbed to a 4-day high of 95.34. The pair was valued at 95.11 when it ended deals on Friday. If the aussie extends gain, it may find resistance around the 96.00 region.

The aussie advanced to 1.4465 against the euro and held steady thereafter. At Friday's close, the pair was worth 1.4483. Continuation of uptrend is likely to take aussie to a resistance around the 1.44 zone.

The aussie came off from near a 4-month low of 1.0619 against the NZ dollar, rising to 1.0660. The aussie-kiwi pair closed deals at 1.0642 on Friday. The aussie is likely to target resistance around the 1.072 region.

The latest survey from Business New Zealand revealed that New Zealand's services sector expanded at an accelerated pace in June, showing an index score of 54.7. That's up from a downwardly revised 54.1 in May.

Looking ahead, Eurozone industrial production for May is due shortly.

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Source: Alliance News

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