Forex - AUD/USD higher ahead of central bank commentary

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Investing.com - " The Australian dollar traded higher against its U.S. rival during Monday's Asian session ahead of what could be a big week for the Aussie in terms of central bank commentary.

In Asian trading Monday, AUD/USD rose 0.20% to 0.9604. After losing 0.95% last week, the pair is likely to find support at 0.9528, the low from October 17 and resistance at 0.9671, the high from October 24.

The Federal Reserve starts a two-day meeting Tuesday, which will be widely watched because markets want clarity on the Fed's intentions to delay tapering of its USD85 billion-a-month bond-buying program until at least the end of the first quarter of 2014.

Reserve Bank of Australia Governor Glenn Stevens is also scheduled to speak on Tuesday. Although further rate cuts from RBA in the near-term are seen as unlikely, the central bank's efforts to jolt non-mining sectors of the world's 12th-largest economy are being harmed by the strong dollar.

"Either there will be a fall in the exchange rate sufficient to restore competitiveness or there will be a redoubled effort by business to take out labour costs. Either way, the Reserve Bank's hoped-for revival in non-mining investment is unlikely to come soon," according to The Australian.

Although the Aussie came under some pressure last week after Chinese interbank lending rates surged to the highest level since June on Thursday, renewing fears over a cash crunch in the country's financial system, market observers see further upside for the Aussie.

AUD/USD moving to 0.9700 appears likely and some traders do not see legitimate selling pressure kicking in until the pair hits 0.9750.

Elsewhere, AUD/JPY rose 0.25% to 93.59 while AUD/NZD was flat at 1.1576. Markets in New Zealand are closed for a public holiday.


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This article appears in: Investing , Forex and Currencies

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