Commodity Currencies Gain On Rebounding Oil Price
Commodity currencies such as the Australian, the New Zealand and the Canadian dollars strengthened against their major counterparts in the Asian session on Friday amid rising risk aversion, as sentiment improved on rebounding oil prices.
Crude oil for April delivery are currently up $0.86 at $38.70 a barrel. Crude oil prices rose after the European Central Bank cut interest rates and expanded its asset-buying program.
The stimulus may be a final push to jump start the sluggish euro zone economy.
Worries concerning record U.S. inventories and the global supply glut have been offset by speculation that OPEC will soon agree to curb output.
In other economic news, data from Statistics New Zealand showed that food prices in New Zealand dipped 0.6 percent on month in February. That missed forecasts for a flat reading following the 2.0 percent increase in January.
On a yearly basis, food prices dipped 0.5 percent after losing 0.6 percent in the previous month.
Data from Business NZ showed that the manufacturing sector in New Zealand continued to expand in February, albeit at a slower pace, with a Performance of Manufacturing Index score of 56.0. That's down from the upwardly revised 58.0. In all, the index has been in expansion since October 2012.
Thursday, the NZ dollar fell against its major rivals after the Reserve Bank of New Zealand lowered its Official Cash Rate by 25 basis points, lowering the benchmark to 2.25 percent from 2.50 percent. This came as a surprise, since most forecasts anticipated no change to the OCR. The NZ dollar fell 0.19 percent against the U.S. dollar, 0.05 percent against the yen and 1.68 percent against the euro.
Meanwhile, the Australian and the Canadian dollars showed mixed trading against its major rivals. While the aussie and the loonie rose against the yen and the euro, they held steady against the U.S. dollar.
In the Asian trading, the Australian dollar rose to a 2-day high of 0.9965 against the Canadian dollar, from yesterday's closing value of 0.9945. The aussie may test resistance around the 0.75 area.
Against the U.S. dollar, the yen and the euro, the aussie edged up to 0.7498, 85.03 and 1.4897 from yesterday's closing quotes of 0.7454, 84.33 and 1.4992, respectively. If the aussie extends its uptrend, it is likely to find resistance around 87.00 against greenback, 1.44 against the yen and 1.01 against the euro.
The NZ dollar rose to a 2-day high of 1.1145 against the Australian dollar, from yesterday's closing value of 1.1174. The kiwi is likely to find resistance around the 1.09 region.
Against the U.S. dollar, the yen and the euro, the kiwi edged up to 0.6699, 75.99 and 1.6671 from yesterday's closing quotes of 0.6665, 75.42 and 1.6754, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.68 against the greenback, 79.00 against the yen and 1.59 against the euro.
The Canadian dollar rose to 1.3283 against the U.S. dollar and 85.49 against the yen, from yesterday's closing quotes of 1.3345 and 84.77, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.31 against the greenback and 89.00 against the yen.
Against the euro, the loonie edged up to 1.4829 from yesterday's closing value of 1.4911. The loonie may test resistance near the 1.41 area.
Looking ahead, final German final CPI data and wholesale price index, both for February, are due to be released in the pre-European session at 2:00 am ET.
At 3:10 am ET, European Central Bank Governing Council member and Bank of Finland Governor Erkki Liikanen is expected to speak at the LOGY conference in Helsinki.
At 4:30 am ET, U.K. construction output and trade data, both for January, are slated for release.
In the New York session, Canada unemployment data and U.S. import price index, both for February, and U.S. Baker Hughes rig count data are set to be published.
The material has been provided by InstaForex Company - www.instaforex.com
