Investing.com – The Australian dollar extended gains against its U.S. counterpart on Tuesday, rallying to a fresh 7-week high and re-approaching an all-time high, amid speculation that monetary tightening in China would not affect demand for raw materials and after downbeat U.S. housing data.
AUD/USD hit 1.0149 during early U.S. trade, the pair’s highest since November 9; the pair subsequently consolidated at 1.0145, soaring 0.98%.
The pair was likely to find support at 0.9987, Monday’s low, and resistance at 1.0182, the high of November 5 and an all-time high.
With markets in Sydney closed for holiday and many investors already away on year-end leave, trading volumes were low, resulting in volatile trade.
Earlier in the day, Yi Xianrong, a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences, wrote in a commentary for the China Daily that the decision to raise interest rates over the weekend would help curb asset bubbles and inflation expectations.
Over the Christmas weekend, the People’s Bank of China raised its benchmark deposit and lending rates by 25 basis points for the second time since mid-October. The unexpected move was aimed at reining inflation, which soared to a 28-month high of 5.1% in November.
China is Australia’s largest trading partner.
Meanwhile, industry data showed that the S&P/Case-Shiller home price index fell more-than-expected in October, declining by 0.8%, after rising by a revised 0.4% in September. Analysts expected the house price index to fall by 0.1% in October.
Meanwhile, the Aussie was also up against the euro, with EUR/AUD shedding 0.61% to hit 1.3024.
Later in the day, the U.S. was to release a report on consumer confidence as well as data on manufacturing activity in the Richmond-area.
AUD/USD hit 1.0149 during early U.S. trade, the pair’s highest since November 9; the pair subsequently consolidated at 1.0145, soaring 0.98%.
The pair was likely to find support at 0.9987, Monday’s low, and resistance at 1.0182, the high of November 5 and an all-time high.
With markets in Sydney closed for holiday and many investors already away on year-end leave, trading volumes were low, resulting in volatile trade.
Earlier in the day, Yi Xianrong, a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences, wrote in a commentary for the China Daily that the decision to raise interest rates over the weekend would help curb asset bubbles and inflation expectations.
Over the Christmas weekend, the People’s Bank of China raised its benchmark deposit and lending rates by 25 basis points for the second time since mid-October. The unexpected move was aimed at reining inflation, which soared to a 28-month high of 5.1% in November.
China is Australia’s largest trading partner.
Meanwhile, industry data showed that the S&P/Case-Shiller home price index fell more-than-expected in October, declining by 0.8%, after rising by a revised 0.4% in September. Analysts expected the house price index to fall by 0.1% in October.
Meanwhile, the Aussie was also up against the euro, with EUR/AUD shedding 0.61% to hit 1.3024.
Later in the day, the U.S. was to release a report on consumer confidence as well as data on manufacturing activity in the Richmond-area.