Having registered gains during the past two weeks, Australian dollar traded still higher against its US counterpart on Monday, as speculation appeared that Federal Reserve policymakers will keep the scale of asset purchases at the central banks meeting, starting on Tuesday.
AUD/USD reached a session high at 0.9286 at 3:08 GMT, after which consolidation followed at 0.9250. Support was expected at July 15th low, 0.9036, while resistance was likely to be met at July 24th high, 0.9318.
According to a survey of experts by Bloomberg, the Federal Reserve Bank will abstain from scaling back its monthly purchases, currently at 85 billion USD, at this week’s meeting. “The downside in the Aussie is being protected by the inability of the U.S. dollar to continue to outperform,” said Andrew Salter, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Sydney, cited by Bloomberg. “Anything that puts the first move on tapering back further is going to be negative for the U.S. dollar.”
The Aussie found additional support after prices of iron ore reached their highest level in almost three months. The ore is Australias largest export. The price climbed to 132.60 USD per metric ton on July 26th, the highest point since April 30th.
Additionally, Chinese National Bureau of Statistics reported on Friday that profits of Chinese industrial companies rose by 6.3% in June, which was a significant decrease, compared with the 15.5% jump, recorded in May. Industrial profits in the country rose by 11.1% during the first six months of this year, compared with a surge of 12.3% during the first five months. According to the report, among the 41 industry groups encompassed, 30 registered higher profits while 1 posted a loss. This news caused influence upon the Australian currency, as China is Australias largest trading partner.
Meanwhile, the Aussie traded lower against the euro today, as EUR/AUD added 0.24% to 1.4363 at 7:18 GMT. All in all, Australian dollar advanced 1.3% during the month of July, approaching its first monthly gain since March this year.
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