The Australian dollar strengthened against its major opponents in the Asian session on Monday amid risk appetite, as most Asian stock markets rose following gains from Wall Street on Friday as bond yields declined from recent four-year highs and crude oil prices rose to two-week highs.
In its Monetary Policy Report released last week, the Federal Reserve suggested a gradual pace of interest rate hikes in 2018, offering little indication on need for faster tightening.
Oil prices remained near a two-week high, helped by comments from Saudi Arabia that it would continue to curb exports to stabilize oil markets.
Chinese official and Caixin purchasing managers’ indexes on Wednesday and Thursday respectively may show an easing trend in February because of the timing of the week-long Lunar New Year holidays.
The aussie rose back to 83.98 against the yen, heading to pierce its early 4-day high of 84.04. If the aussie rises further, 86.00 is possibly seen as its next resistance level.
Figures from the Cabinet Office showed that Japan’s leading index declined more than initially estimated in December.
The leading index, which measures the future economic activity, dropped to a 5-month low of 107.4 in December from 108.2 in November. The reading was below the flash estimate of 107.9.
The aussie firmed to 5-day highs of 1.5643 against the euro and 0.7882 against the greenback, from its previous lows of 1.5700 and 0.7829,respectively. The next possible resistance for the aussie is seen around 1.54 against the euro and 0.81 against the greenback.
The aussie reversed from an early low of 0.9908 against the loonie, rising to 0.9946. The aussie is likely to find resistance around the 1.00 level.
On the flip side, the aussie held steady at 1.0742 against the kiwi, after having eased from a 6-day high of 1.0770 seen at 6:30 pm ET.
Looking ahead, U.K. mortgage approvals for January is due in the European session.
At 10:00 am ET, U.S. new home sales data for January is scheduled for release.
The Bank of England Deputy Governor Jon Cunliffe speaks at the PPE Society Speaker Series in Warwick at 1:00 pm ET.