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Forex - Aussie holds weaker in Asia as investors expect easier policy

Published 04/17/2016, 09:44 PM
Updated 04/17/2016, 09:48 PM
Aussie holds weaker
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Investing.com - The Aussie fell sharply after major oil producers failed to reach a deal on an output freeze that has implications for monetary policy as crude oil prices dipped sharply on the news.

AUD/USD traded down 0.76% to 0.7666, while USD/JPY changed hands at 108.11, down 0.62%. Weaker oil prices are seen as aiding current easy monetary policies globally.

New Zealand said first quarter consumer prices rose 0.2%, more than the 0.1% seen quarter-on-quarter and a 0.4% gain seen year-on-year which came in as expected.

NZD/USD traded down 0.16% to 0.6906. The data are in line with the Reserve Bank of New Zealand's projections in its March Monetary Policy Statement, according to ASB chief economist Nick Tuffley.

"Overall, the data published by Stats NZ suggest that, although core inflation pressure is still low, they are starting to lift which may provide the RBNZ with confidence that inflation expectations will also stabilize and recover," Tuffley said.

In China, house prices rose 4.9% for March year-on-year, above the 3.6% gain seen.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.01% to 94.69.

In the week ahead the economic calendar is light, with the U.S. set to release housing sector data.

The European Central Bank will hold its monetary policy meeting on Thursday and the euro zone is to release data on private sector activity on Friday.

Last week, the dollar slid against the other major currencies on Friday following the release of lackluster U.S. economic reports, but the greenback still ended the week higher.

The drop in the dollar came after reports showing that U.S. industrial production fell more than expected in March and consumer sentiment deteriorated slightly this month.
The University of Michigan said the preliminary reading of its consumer sentiment index came in at 89.7 in April, down from 91.0 in March and lower than the 92.0 reading forecast by economists.

Another report showed that U.S. industrial output fell 0.6% in March, worse than the 0.1% decline economists had expected.

The reports underlined the view that the Federal Reserve is likely to stick to a cautious approach on future interest rates increases.

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