Australian dollar rose for the fifth day in a row before Federal Reserve Bank of New York President William Dudley takes a statement today. The Aussie advanced against almost all of its major peers, as Kevin Rudd was sworn in as Australia’s prime minister, having won the leadership ballot over Julia Gillard yesterday.
“We expect Dudley to sing from the same songbook as some other Fed speakers this week to dampen the market’s reaction to Fed tapering,” said Andrew Salter, a currency strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Sydney, cited by Bloomberg. “The markets are positioned very, very short the Australian dollar and very, very long the U.S. dollar, so the news flow out of the U.S. has to continue being positive to support that.”, he added.
AUD/USD rose to 0.9323 at 6:42 GMT, adding 0.49% for the day, while during the recent four trading days Aussie gained 0.9%. Support was expected at June 25th low, 0.9197, while resistance was to be met at June 19th high, 0.9557.
According to Bloomberg, technical indicators suggested, that the Australian dollar’s 11% decline against the US dollar during this quarter, the most among the 31 major currencies, tracked by Bloomberg, has been too fast, and a reversal is expected.
However, demand for the greenback remained high, boosted by expectations that the Federal Reserve Bank will start to taper its asset purchases later this year, despite the downward revision of US Gross Domestic Product.
On Wednesday the Commerce Department of the United States announced that US economy managed to expand by 1.8% during the first quarter of the year on annual basis, below the expected 2.4% increase. Additionally, US Personal Consumption Expenditures rose by 2.6% during Q1 on annual basis, slowing down in comparison with projections and the recorded rate of increase in the previous period, which was 3.4%.
Later in the trading day the United States was expected to release data on Core Personal Consumption Expenditures, Initial Jobless Claims and Pending Home Sales.
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