Aussie and kiwi attempt a rebound; Dollar stands firm on strong US data

Published 12/28/2016, 04:30 AM
The US dollar continued to inch higher on Wednesday as strong consumer confidence data added support to the greenback in thin holiday trading, while most pairs were stuck in tight ranges ahead of the New Year holiday.

Consumer confidence in the United States rose to a 15-year high in December according to the Conference Board’s survey released yesterday. The dollar was up slightly at 117.58 yen in late Asian session, which is just under 1% below its 10-month high of 118.66 yen reached earlier this month.

The yen was weaker across the board despite positive data out of Japan today. Industrial production in Japan grew by 1.5% month-on-month in November as estimated in the preliminary reading. This was roughly in line with forecasts of 1.6%. The outlook for the next two months was also positive, with Japanese manufacturers expecting to raise output by 2.2% in January.

Retail sales figures rounded up this week’s batch of Japanese data and went some way in compensating for yesterday’s disappointing household spending numbers. Retail sales rose by 1.7% in November from the prior month, beating forecasts of 0.6%.

However, the yen was unable to find much support in thin volumes as investors held off from unwinding their dollar positions.

The euro climbed to 1.0479 dollars earlier in Asian trading but fell back to around 1.0440 in late session. The single currency has managed to hold above the 14-year lows it touched last week even as key elections in France and Germany lie ahead in 2017, while doubts remain about whether the Italian government’s €20 billion fund to recapitalize the country’s indebted lenders will be enough to stave off a fresh banking crisis.

The pound saw similar moves to the euro, rising to just below 1.23 dollars in early session before easing to around 1.2260.

The Australian and New Zealand dollars bucked the trend as they were lifted by a rebound in commodity prices. Iron ore prices surged over 3% today, reversing some of its recent sharp losses. This helped the aussie to briefly pop above the 0.72 level against its US counterpart before settling around 0.7197 in late Asian trading. The kiwi saw a stronger rebound and was last up 0.5% at 0.6925.

In commodities, both gold and oil extended Tuesday’s gains in today’s Asian session. Gold prices edged up to $1141 an ounce, while US crude rose above $54 a barrel.

The rest of the day looks set to be another quite one in terms of data with only pending home sales out of the US likely to attract some attention.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.