Australian Dollar Rises Amid Risk Appetite

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Thursday, as Asian stock markets traded higher amid optimism about an interest rate cut by the U.S. Fed in September ahead of the release of closely watched U.S. consumer price inflation data later in the day. The data is expected to show inflation continued to moderate in June.

During a congressional testimony, U.S. Fed Chair Jerome Powell said more good data would strengthen the central bank's confidence inflation is moving sustainably toward its 2 percent target and lead to a potential interest rate cut.

Powell also warned of the risk that leaving interest rates at an elevated level for too long could jeopardize economic growth. He also noted that reducing policy restraint too late or too little could unduly weaken economic activity and employment.

Gains across most sectors led by gold miners, financial and technology stocks, also led to the upturn of investor sentiment.

Crude oil prices settled higher after data showed a bigger than expected drop in U.S. crude inventories last week. West Texas Intermediate Crude oil futures for August ended higher by $0.69 at $82.10 a barrel.

In the Asian trading today, the Australian dollar rose to a 33-year high of 109.38 against the yen and nearly a 6-1/2-month high of 0.6764 against the U.S. dollar, from yesterday's closing quotes of 109.08 and 0.6747, respectively. If the aussie extends its uptrend, it is likely to find resistance around 110.00 against the yen and 0.68 against the greenback.

Against the euro and the Canadian dollar, the aussie advanced to 3-day highs of 1.6024 and 0.9215 from Wednesday's closing quotes of 1.6049 and 0.9188, respectively. The aussie may test resistance near 1.59 against the euro and 0.93 against the loonie.

Meanwhile, the safe-have currency or the yen strengthened against other major currencies in the Asian session today.

In economic news, the value of core machine orders in Japan was down a seasonally adjusted 3.2 percent on month in May, the Cabinet Office said on Thursday - coming in at 857.8 billion yen. That misses forecasts for an increase of 0.9 percent following the 2.9 percent decline in April.

On a yearly basis, orders jumped 10.8 percent - exceeding expectations for 7.2 percent and up sharply from 0.7 percent in the previous month. For the second quarter of 2024, core machine orders are seen lower by 1.6 percent on quarter and 2.8 percent on year at 2,581.0 billion yen.

In the Asian trading today, the yen fell to a 32-year low of 175.32 against the euro and a 17-year low of 208.11 against the pound, from early highs of 174.98 and 207.58, respectively. If the yen extends its downtrend, it is likely to find support around 176.00 against the euro and 209.00 against the pound.

Against the U.S. dollar and the Swiss franc, the yen slipped to 161.76 and 179.89 from early highs of 161.47 and 179.62, respectively. On the downside, 164.00 against the greenback and 180.00 against the franc are seen as the next support levels for the yen.

Against the New Zealand and the Canadian dollars, the yen edged down to 98.60 and 118.78 from early highs of 98.31 and 118.52, respectively. The yen is likely to find support around 99.00 against the kiwi and 120.00 against the loonie.

Looking ahead, U.K. NIESR monthly GDP tracker data, U.S. inflation data for June, U.S. weekly jobless claims data and U.S. Federal budget balance report for June are slated for release in the New York session.