Australian And New Zealand Dollars Rise Before Bernanke Testimony

Australian And New Zealand Dollars Rise Before Bernanke Testimony


The Australian and New Zealand dollars climbed against their major counterparts in early Asian trading on Tuesday as investors are focusing on U.S. Federal Reserve Chairman Ben Bernanke's semi-annual testimony for any hints of new stimulus to help the economy.
Bernanke testifies to the Senate Banking Committee on Tuesday and to the House Financial Services panel on Wednesday.
Minutes of the Fed's June policy-setting meeting released last week revealed that only a few board members thought that more asset purchases would be necessary.
Several other officials indicated that more action could be warranted only if growth slows, risks intensified or if inflation seemed likely to fall "persistently" below their goal.
Apart from hopes of more stimulus from the U.S. central bank, there are also signs that Chinese monetary authorities may ease monetary policy further to support the slowing economy.
Chinese Premier Wen Jiabao warned over the weekend that China's economy has not yet entered a recovery and "difficulties may continue for some time."
He added that that policy makers were likely to introduce measures to boost growth in the second half of the year.
The Australian dollar broke 1.03 level against the U.S. dollar in early Asian deals and reached 1.0305, its highest level since July 05. If the aussie-greenback pair gains further, it will test resistance around the 1.032 level. The pair ended yesterday's trading at 1.0249.
Minutes from the Reserve Bank of Australia's July 03 meeting revealed today that the board members felt there was no need to change its key interest rate. The board members added that the Australian economy was continuing to gather momentum for the past year, although there remained significant downside risk from the European Crisis.
At the meeting, the RBA held the benchmark cash rate steady at 3.5 percent, as widely expected. That followed a 50 basis point reduction in May and a quarter-point cut in June.
The Australian dollar strengthened to 5-day highs of 81.34 against the yen and 1.0443 against the Canadian dollar, compared to yesterday's close of 80.83 and 1.0405, respectively. The next upside target level for the Australian currency is seen at 81.8 against the yen and 1.046 against the loonie.
The Australian dollar also climbed to a 5-day high of 1.2885 against the New Zealand dollar with 1.291 seen as the next upside target level. The aussie-kiwi pair was quoted at 1.2854 at yesterday's close.
Against the European single currency, the Australian dollar rose to as high as 1.1945 and if the aussie strengthens further, it will break yesterday's record high of 1.193. At yesterday's New York session close, the euro-aussie pair was quoted at 1.1981.
The New Zealand also gained today, hitting an 11-day high of 0.8007 against the U.S. currency. If the kiwi rises further, it will target the 0.805 level. The kiwi-greenback pair was worth 0.7977 at yesterday's close.


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