Commodity Currencies Rise On Rising Risk Appetite

 

rtt news-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 appetite, after data showed that consumer prices in China rose more than expected in September. Also, the higher crude oil prices boosted investor appetite for riskier assets.

Data from the National Bureau of Statistics showed that the consumer prices in China were up 1.9 percent on year in September. That exceeded forecasts for 1.6 percent, and was up from 1.3 percent in August.

On a monthly basis, consumer prices gained 0.7 percent after gaining 0.1 percent a month earlier.

Rising Risk Appetite

Producer prices were up 0.1 percent on year, turning positive after more than four years of contraction. That compared to forecasts for a 0.3 percent decline following the 0.8 percent contraction in the previous month.

Crude for November delivery is currently up by 0.38 percent or $50.82 per barrel. The crude oil price rose as supply decreased in the U.S. fuel market.

However, the Energy Information Administration reported Thursday that U.S. crude oil inventories had jumped by 4.9 million barrels in the week to October 7.

Traders await the OPEC's meet to make a final decision on the output cap, which is held during the end of November.

Thursday, the Australian and the New Zealand dollars had shown mixed trading against their major counterparts. While the Australian dollar fell against the U.S. dollar and the yen, it held steady against the euro.

The New Zealand dollar fell against the U.S. dollar and rose against the euro. But, it held steady against the yen.

The Canadian dollar fell 0.14 percent against the U.S. dollar, 0.64 percent against the yen, and 0.02 percent against the euro.

In the Asian trading, the Australian dollar rose to a 2-month high of 1.4517 against the euro, a 3-day high of 0.7607 against the U.S. Dollar, and a 2-day high of 79.01 against the yen, from yesterday's closing quotes of 1.4606, 0.7569, and 78.47, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.44 against the euro, 0.77 against the greenback, and 80.00 against the yen.

Against the Canadian dollar, the aussie advanced to 1.0039 from an early 3-day low of 0.9978. The aussie may test resistance around the 1.01 area.

The NZ dollar rose to a 10-day high of 1.5495 against the euro, and a 4-day high of 74.07 against the yen, from yesterday's closing quotes of 1.5574 and 73.57, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 1.52 against the euro, and 75.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi advanced to 3-day highs of 0.7133 and 1.0655 from yesterday's closing quotes of 0.7096 and 1.0665, respectively. The kiwi is likely to find resistance around 0.72 against the greenback and 1.05 against the aussie.

The Canadian dollar rose to a 5-week high of 1.4568 against the euro, from yesterday's closing value of 1.4585. On the upside, 1.43 is seen as the next resistance level for the loonie.

Against the U.S. dollar and the yen, the loonie advanced to a 3-day high of 1.3184 and a 2-day high of 78.83 from yesterday's closing quotes of 1.3193 and 78.59, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.30 against the greenback and 80.00 against the yen.

 
Meanwhile, the safe-haven yen fell against its major rivals influenced by rising risk appetite.

In economic news, data from the Bank of Japan showed that producer prices in Japan was flat on month in September, versus forecasts for -0.1 percent after easing 0.3 percent in August. On a yearly basis, producer prices were down 3.2 percent, in line with expectations after sliding 3.6 percent in the previous month.

Export prices were up 0.1 percent on month and down 1.6 percent on year, the bank said, while import prices gained 0.5 percent on month and dropped 7.0 percent on year.

The M2 money stock in Japan was up 3.6 percent on year in September,coming in at 943.2 trillion yen. That followed the 3.3 percent gain in August.

The yen fell to 114.88 against the euro and 127.39 against the pound, from yesterday's closing quotes of 114.61 and 127.04, respectively. If the yen extends its downtrend, it is likely to find resistance around 117.00 against the euro and 134.00 against the pound.

Against the U.S. dollar and the Swiss franc, the yen dropped to 104.16 and 105.46 from yesterday's closing quotes of 103.68 and 105.12, respectively. The yen may test support near 105.00 against the greenback and 107.00 against the franc.

Looking ahead, Swiss PPI for September, U.K. construction output for August and Eurozone trade balance for August are due to be released later in the day.

At 7:45 am ET, Bank of England MPC Member Kristin Forbes will participate in a panel discussion about Central Europe's growth perspectives at the National Bank of Poland 6th Annual Conference, in Warsaw, Poland.

In the New York session, U.S. retail sales data and PPI- both for September, U.S. business inventories for August, U.S. University of Michigan's preliminary consumer sentiment index for October, and U.S. Baker Hughes rig count data are slated for release.

At 8:30 am ET, Federal Reserve Bank of Boston President Eric Rosengren will deliver opening remarks at the Federal Reserve Bank of Boston's Annual Research Conference.

At 1:30 pm ET, Federal Reserve Chair Janet Yellen will deliver a speech titled "Macroeconomic Research After the Crisis" at the Federal Reserve Bank of Boston's Annual Research Conference.

Later in the day, Bank of England Governor Mark Carney is expected to speak at the Future Forum 2016, in Birmingham.

 

 

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