Forex - AUD/USD edges higher but gains capped

Published 01/18/2012, 03:10 AM
AUD/USD
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AUD/NZD
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Investing.com - The Australian dollar edged higher against its U.S. counterpart on Wednesday, but gains were capped by concerns over the financial crisis in the euro zone ahead of a series of government debt auctions and new Greece talks.

AUD/USD hit 1.0405 during late Asian trade, the daily high; the pair subsequently consolidated at 1.0386, adding 0.09%.

The pair was likely to find support at 1.0301, the low of January 17 and resistance at 1.0500, the high of October 24.

Portugal was preparing to sell up to EUR2.5 billion of treasury bills later Wednesday in its biggest debt auction since last year's bailout.

Meanwhile, Germany was set to raise around EUR4 billion euros in the bond market, followed by Spain and France on Thursday.

Greece's debt swap talks with international creditors were also set to resume on Wednesday, as the country needs to reach a deal in order to secure a new bailout and avoid a default.

In Australia, official data showed that new motor vehicle sales fell unexpectedly in December, declining 2.9% after a 0.6% fall the previous month.

Analysts had expected new motor vehicle sales to rise 2.3% in December.

A separate report by Westpac Banking Corporation showed that consumer sentiment in Australia rose 2.4% in January after a 8.3% fall the previous month.

Sentiment was boosted earlier amid expectations that China will loosen its monetary policy to boost growth, after data showed that the country’s economy grew at the slowest pace in more than two years and expanded less than 9% for the first time since mid-2009.

Elsewhere, the Aussie was lower against the New Zealand dollar with AUD/NZD shedding 0.15%, to hit 1.2943.

Also Wednesday, a report by the real Estate Institute of New Zealand showed that house price inflation declined 0.1% in December after a 1.1% rise the previous month.

Later in the day, the U.S. was to release official data on producer price inflation and industrial production.


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