Forex - AUD gains after better than expected housing finance data

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Investing.com - The Australian dollar traded slightly higher after housing finace data came in stronger than expected, signalling demand from the sector is aiding the economy.

AUD/USD traded at 0.936, up 0.02%, after the data.

Earlier, Australia's Westpac-MI Consumer Sentiment for April rose 0.3% to 99.7, but below the 100.0 level for the second month in a row as consumer finances improved along with the outlook on the jobs market. February housing finance data rose 2.3%, compared to an expected gain of 2.0%.

The data sets are closely watched by the Reserve Bank of Australia for signals the economy is rebalancing to domestic demand as a mining investment boom wanes.

The yen weakened against the dollar as markets continue to assess the Bank of Japan's possible reactions to a sales tax hike to 8% from 5% that started April 1.

USD/JPY traded at 101.93, up 0.10%, in a thin data day.

Overnight, the dollar traded lower against most major currencies on concerns that the minutes from the Federal Reserve's March policy meeting due for release on Wednesday will reveal a less-than-stellar take on U.S. recovery.

Last week's U.S. payrolls report came in slightly below expectations, which unraveled investors, as Fed Chair Janet Yellen has said slack labor markets will call for accommodative policies to stay in place for some time.

Demand for the euro remained firm after European Central Bank officials on Monday stressed that while fresh easing measures may be needed to steer the euro zone away from deflationary pressures, implementation of such tools is not imminent.

Last week the ECB left the door open to further stimulus measures, saying that unconventional monetary policy instruments may be necessary to avert the risk of ongoing low inflation in the euro zone.

Elsewhere, emerging-market currencies rose across the board on sentiments that even though the Federal Reserve will continue to unwind its bond-purchasing program this year, policy will remain loose for some time to come and make higher-yielding currencies more attractive.

Escalating tensions in Ukraine chipped away at the dollar as well.

Pro-Russian activists in Ukraine's industrial center of Donetsk declared their independence from Kiev, a move Ukrainian leaders described as part of a Russian-orchestrated plan to justify an invasion.

U.S. Secretary of State John Kerry said earlier that Russian agents were encouraging unrest in eastern Ukraine and said Moscow was preparing military action in the region.


The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.04% at 79.88.

On Tuesday, the dollar will move as markets digest the minutes of the Federal Reserve's March policy meeting.

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This article appears in: Investing , Forex and Currencies

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