Aussie Soars To Fresh 1-year High Against Euro, Yen And Greenback
The Australian dollar staged a strong rally against its major opponents on Friday morning in Asia as a modest surge in most of Asia-pacific stocks, buoyed by Thursday’s better-than-expected economic and earnings reports added to investors’ appetite for riskier and higher-yielding currencies.
The Australian dollar thus advanced to a fresh 1-year high against the currencies of Europe, US and Japan.
The Australian stock market opened on a mixed note today with investors choosing to tread a cautious path in early trades after recent strong rallies. Energy, healthcare and consumer staples stocks are edging higher, while financials, materials and industrials are exhibiting a mixed trend.
The benchmark S&P/ASX 200 index, which rose to 4,877 after an early fall to 4,851.4, is currently trading at 4,864, up 4.1 points, or 0.1%, over its previous close. The broader All Ordinaries index is up 4.5 points, or 0.1%, at 4,867.
Among other stock markets in the Asia-Pacific region, Japan, New Zealand, Singapore and Korea are trading modestly higher. Stock markets in the region had ended mostly higher on Thursday.
The Australian dollar surged up to 1.6143 against the euro around 8:45 pm ET, the highest mark since June 5, 2008. This was up by more than 0.6 percent from Thursday’s New York session closing value of 1.6243. The euro-aussie pair is presently worth 1.616 with 1.604 seen as the next target level.
From the euro area, trade balance data from Italy and Euro-zone for the month of August will be made public in the upcoming European session.
Extending its 4-day winning streak, the Australian dollar advanced more than 0.7 percent to 0.9273 against the greenback around 8:50 pm ET from Thursday’s North American session closing value of 0.9207. This set the highest point for the pair since August 5, 2008. The aussie-buck pair is presently worth 0.926 with 0.932 seen as the next target level.
The greenback turned lower yesterday following the U.S. Department of Labor revealed that consumer prices rose by 0.2 percent in September. This followed an advance of 0.4 percent in the previous month and also matched economists’ expectations.
Core prices, which exclude the volatile food and energy sectors, were also up by 0.2 percent. This followed a 0.1 percent increase in August. Experts were looking for core consumer prices to edge up to 0.1 percent.
Yesterday, the Labor Department released its report on initial jobless claims in the week ended October 10th, showing that first-time claims for unemployment benefits fell to 514,000 from the previous week’s revised figure of 524,000. Economists had been expecting jobless claims to edge down to 520,000 from the 521,000 originally reported for the previous week.
Conditions for New York manufacturers improved significantly in October, according to a report released by the Federal Reserve Bank of New York. The New York Fed said its general business conditions index rose to 34.6 in October from 18.9 in September, with a positive reading indicating growth in the manufacturing sector. Economists had been expecting the index to fall to a reading of 17.5.
The Australian currency continued to creep higher against the Japanese yen today, rising to 84.25 around 8:50 pm ET. This set the highest value for the aussie-yen pair since October 1st, 2008. The aussie-yen pair has thus appreciated more than 1 percent from Thursday’s North American session closing value of 83.38.
Looking ahead, Japan’s Ministry of Finance will release weekly capital inflow numbers for stocks and bonds. Also, Bank of Japan Governor Masaaki Shirakawa will speak at a credit unions meeting.
The Australian dollar that closed yesterday’s deals at 1.2375 against the New Zealand dollar saw choppy trading on Friday morning in Asia. The aussie-kiwi pair moved in a tight range between 1.234 and 1.24 in the session. The pair is presently quoted at 1.2378.
Looking forward to the North American session, the US Treasury Department is due to release a report on the flows of financial instruments into and out of the U.S. for August at 9:00 AM ET.
At 9:15 am ET, the US Federal Reserve Board will release its industrial production report for September. Analysts expect the headline figure contracted 0.2 percent in the month from 0.8 percent in August.
The preliminary reading of the University of Michigan’s consumer sentiment index for October is due to be released at 10:00 AM ET. The report is expected to show that the consumer sentiment index rose to 73.3 in the month.
