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Commodity currencies such as Australia, the New Zealand and the Canadian dollars strengthened against their major counterparts in the Asian session on Thursday, as Asian Share markets traded higher amid optimism about near-term rate cuts by the U.S. Fed ahead of the release of key U.S. inflation data later in the day and tomorrow, which will affect the outlook for interest rates.
With economists expecting the reports to show slowdowns in the annual rate of core price growth, the data could bolster optimism about near-term rate cuts by the Fed.
Ahead of the reports, CME Group's FedWatch Tool is currently indicating a 64.5 percent chance the Fed will cut rates by a quarter point at its March meeting.
In economic news, data from the Australian Bureau of Statistics showed that Australia posted a merchandise trade surplus of A$11.437 billion in November. That exceeded expectations for a surplus of A$7.50 billion following the upwardly revised A$7.660 billion surplus in October.
Exports rose 1.7 percent on month to A$46.314 billion, while imports slumped 7.9 percent to A$34.877 billion.
Data from Statistics New Zealand showed that the total number of building permits issued in New Zealand was down a seasonally adjusted 10.6 percent on month in November, coming in at 2,958. In the year ended November 2023, the actual number of new dwellings consented was 38,209, down 24 percent on year.
In the Asian trading today, the Australian dollar rose to more than a 5-week high of 97.80 against the yen, from yesterday's closing value of 97.63. The aussie may test resistance near the 98.00 region.
Against the U.S. and the Canadian dollars, the aussie advanced to 2-day highs of 0.6726 and 0.8985 from yesterday's closing quotes of 0.6698 and 0.8961, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.68 against the greenback and 0.90 against the loonie.
The aussie edged up to 1.6328 against the euro, from Wednesday's closing value of 1.6372. On the upside, 1.61 is seen as the next resistance level for the aussie.
The NZ dollar rose to more than a 5-week high of 90.97 against the yen, from yesterday's closing value of 90.74. The kiwi may test resistance around the 92.00 area.
The kiwi touched yesterday's high of 0.6255 against the U.S. dollar. At Wednesday's close, the kiwi was trading at 0.6227 against the greenback. On the upside, 0.64 is seen as the next resistance level for the kiwi.
Against the euro and the Australian dollar, the kiwi edged up to 1.7555 and 1.0745 from yesterday's closing quotes of 1.7616 and 1.0755, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 1.74 against the euro and 1.06 against the aussie.
The Canadian dollar rose to a 2-day high of 1.3357 against the U.S. dollar, from yesterday's closing value of 1.3378. If the loonie extends its uptrend, it is likely to find resistance around the 1.32 region.
Against the yen, the loonie edged up to 108.96 fron an early low of 108.72. On the upside, 110.00 is seen the next resistance level for the loonie.
The loonie climbed to 1.4663 against the euro, from Wednesday's closing value of 1.4677. The next resistance level for the loonie is seen around the 1.45 region.
Looking ahead, U.S. weekly jobless claims data, inflation data for December and U.S. Fed's budget statement for the month December are slated for release.
