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Australian Dollar ascends on Yellen’s testimony

BY SHAMEEM MUSA

The Australian dollar has continued its upward ascendency over the past 24 hours benefitting from a Greenback which has retreated across the board. Following testimony from US Federal Reserve Chair Janet Yellen which signalled that policy makers won’t be rushing into tightening policy further, the persistently low inflationary environment which continues to complicate the path to higher rates will be placed front and centre through to the end of this week. Ahead of PPI and CPI numbers which are expected out of the United States this evening and on Friday, the Australian dollar touched an overnight high of 0.7685 when valued against its US Counterpart, stronger this morning as it currently buys 76.77 US Cents.

The New Zealand Dollar is marginally higher against the Greenback this morning with solid gains around 0.8% helped by the softer USD and positive risk sentiment. The Kiwi reached an overnight high of 0.7269 after Federal Reserve chair Janet Yellen said the Fed would not need to raise rates "all that much further".  Pretty quiet day ahead on the local economic data front with the only scheduled release today the Business NZ Manufacturing Index for the month of June. The NZD/USD pair is currently trading at 0.7254. We now expect support to hold on moves approaching 0.7210 while any upward push will likely meet resistance around 0.7265.

The Great British Pound advanced against the US Dollar yesterday on the back of strong UK employment data. The result indicated the unemployment rate fell to its lowest level since 1975, down to 4.5%. There are currently 32.01 million people in work, 175,000 more than for December 2016 to February 2017 and 324,000 more than for a year earlier. The GBP/USD pair reached an overnight high of 1.2900 after the unemployment data release. On a sour note speeches by Bank of England chief economist Andy Haldane and his colleague the Bank of England Deputy Governor Ben Broadbent said they are not ready to hike official interest rates just yet. Following that announcement, the GBP/USD pair fell to 1.2845. The Pound Sterling is currently trading at 1.2892 against the Greenback. 

The Euro Dollar has once again touched a fresh 14-month high against the Greenback during yesterday’s early session amid fresh concerns over the Trump administrations alleged connection to Russia, the US Dollar faced selling pressure as investors worried it presented a fresh distraction from the administration’s economic agenda. The pair started to erase gains later in the day as Janet Yellen’s addressed congress in its semi-annual testimony, her comments seemed to present an optimistic tone about the U.S economy which helped the Greenback recover, currently EUR/USD changing hands at 1.1415 at time of writing. On the data front, oil futures rose on the back of Crude Oil Inventories falling by 7.6 million barrels in the last week, compared with expectations for a decrease of 2.9 million barrels. Looking ahead Yellen will continue to answer questions from Congress and we also see the release of US PPI and Unemployment Claims.