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Forex - AUD/USD rises to 1-month highs, budget report supports

Published 05/14/2014, 02:59 AM
Aussie rises vs. greenback supported by Australia budget report
AUD/USD
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AUD/NZD
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Investing.com - The Australian dollar rose to one-month highs against its U.S. counterpart on Wednesday, still supported by the annual budget report released on Tuesday by Australia's Treasury.

AUD/USD hit 0.9409 during late Asian trade, the pair's highest since April 14; the pair subsequently consolidated at 0.9398, climbing 0.44%.

The pair was likely to find support at 0.9320, the low of May 8 and resistance at 0.9460, the high of April 10 and a more than four-month high.

On Tuesday, Australia's Treasurer Joe Hockey said the government aims to nearly halve its budget deficit over the next year through a combination of spending cuts and tax increases.

According to the Treasury's budget report, the deficit is forecast to fall from A$50 billion to A$30 billion, while the spending cuts however are expected to lead to thousands of job losses.

The report also mentionned the government's plans to spend as much as A$11 billion on key infrastructure projects such as roads, railways and a new airport in Sydney.

The Aussie was higher against the New Zealand dollar, with AUD/NZD edging up 0.22% to 1.0872.

Also Wednesday, official data showed that retail sales in New Zealand rose 0.7% in the first quarter, disappointing expectations for a 0.9% increase, after a 1.2% advance in the previous quarter.

Core retail sales, which exclude automobiles and gas stations, rose 0.8% in the last quarter, compared to expectations for a 0.9% gain. Core retail sales in the fourth quarter of 2013 were revised up to a 1% increase from a previously estimated 0.7% rise.

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

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