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Forex - Aussie edges down after housing data, kiwi retraces gains

Published 11/29/2016, 08:35 PM
Updated 11/29/2016, 08:36 PM
Aussie weaker after housing
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Investing.com - The Aussie fell on Wednesday in Asia after mixed housing related data and the yen gain slightly, while the kiwi retraced gains after the central bank highlighted housing market risks in its latest financial stability report.

USD/JPY changed hands at 112.33, down 0.04%, while AUD/USD traded at 0.7478, down 0.07%. NZD/USD traded at 0.7140, up 0.17%.

In Japan, industrial production rosee 0.1%, beating a 0.1% fall seen month-on-month in October.

Australia reported building approvals plunged 12.6%, compared to an expected gain of 1.5% month-on-month in October and private sector credit fell 3.4%, compared to a 0.4% gain seen in October month-on-month. However, housing credit rose 0.6% in October, from a 0.5% increase the previous month.

A renewed pickup in investor mortgages is likely to make the Reserve Bank of Australia more watchful of the developments in the housing market. On the other hand the continuation of a subdued pace of personal-credit growth remains a concern for the economy's growth outlook because the RBA is relying on household consumption to help growth.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, wrose 0.04% to 101.02.

Overnight, the dollar trimmed gains but remained broadly supported against the other majors currencies on Tuesday, as the release of strong U.S. data added to optimism over the strength of the economy.

Official data showed that the second estimate of third quarter U.S. gross domestic product rose 3.2%, up from the initial reading of a 2.9% expansion.

Analysts were looking for a smaller upward revision to just 3.0%. In addition, the Conference Board said its consumer confidence index rose to 107.1 this month from a reading of 100.8 in October, whose figure was revised from a previously reported 98.6.

Analysts had expected the index to increase to 101.2 in November. The upbeat data added to optimism over the outlook for the U.S. economy amid expectations that increased fiscal spending and tax cuts under the Trump administration will spur economic growth and inflation.

The strong report also added to expectations that the Federal Reserve will decide to raise interest rates at its December policy meeting.

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