Investing.com – The Australian dollar was up against its U.S. counterpart on Thursday, advancing to a 3-day high after weak U.S. inflation data supported the Federal Reserve’s case for economic stimulus and as euro zone debt concerns subsided.
AUD/USD hit 0.9903 during European afternoon trade, the pair’s highest since November 15; the pair subsequently consolidated at 0.9886, jumping 0.91%.
The pair was likely to find support at 0.9725, Wednesday’s low and resistance at 1.0002, the high of November 12.
On Wednesday, official U.S. data showed that core consumer price inflation, which excludes food and energy costs, was unexpectedly flat in October for the second successive month, while consumer prices rose less-than-expected. Also, the annual underlying inflation rate hit 0.6%, the lowest level since records began in 1957.
Meanwhile, earlier Thursday, the Reserve Bank of Australia’s Deputy Governor Ric Battellino said that after two decades of almost interrupted growth the country’s economy now lacked the capacity to expand much faster without stoking inflation.
“As growth of the economy picks up, the pressures on inflation are more likely to be upward than downward,” Battellino said. “Spare capacity is limited” in the economy and the RBA’s “early, modest” rate increase guarded against accelerating prices, he added.
Meanwhile, the Aussie was down slightly against the euro, with EUR/AUD edging up 0.05% to hit 1.3818.
Later in the day, the U.S. was to publish key weekly data on initial jobless claims, while the Federal Reserve Bank of Philadelphia was due to release a report on manufacturing activity.
AUD/USD hit 0.9903 during European afternoon trade, the pair’s highest since November 15; the pair subsequently consolidated at 0.9886, jumping 0.91%.
The pair was likely to find support at 0.9725, Wednesday’s low and resistance at 1.0002, the high of November 12.
On Wednesday, official U.S. data showed that core consumer price inflation, which excludes food and energy costs, was unexpectedly flat in October for the second successive month, while consumer prices rose less-than-expected. Also, the annual underlying inflation rate hit 0.6%, the lowest level since records began in 1957.
Meanwhile, earlier Thursday, the Reserve Bank of Australia’s Deputy Governor Ric Battellino said that after two decades of almost interrupted growth the country’s economy now lacked the capacity to expand much faster without stoking inflation.
“As growth of the economy picks up, the pressures on inflation are more likely to be upward than downward,” Battellino said. “Spare capacity is limited” in the economy and the RBA’s “early, modest” rate increase guarded against accelerating prices, he added.
Meanwhile, the Aussie was down slightly against the euro, with EUR/AUD edging up 0.05% to hit 1.3818.
Later in the day, the U.S. was to publish key weekly data on initial jobless claims, while the Federal Reserve Bank of Philadelphia was due to release a report on manufacturing activity.