RTTN:Australian Dollar Extends Rally Against Majors; Fed In Focus
(RTTNews) - After a brief slide in early Asian deals, the Australian dollar gained and has been extending its rally against other major currencies in early European trading on Wednesday ahead of the U.S. Federal Reserve's monetary policy announcement later in the day.
Although Fed is expected to keep rates unchanged, the central bank's updated economic forecast and the Chairman Ben Bernanke's accompanying press conference will be closed watched.
The Australian dollar is currently worth 1.0417 against the US dollar and 1.3200 against the euro, compared to yesterday's close of 1.0330 and 1.3265, respectively. The next upside target level for the aussie is seen at 1.050 against the greenback and 1.315 against the euro.
The Aussie's slide in early deals came as a report showed that the country's building approvals fell by more than expected in September.
Data released by the Australian Bureau of Statistics showed that total permits issued for constructing and renovating houses and apartments in Australia declined a seasonally adjusted 13.6 percent month-on-month in September, following a 10.7 percent increase in the previous month. This was steeper than the 4.9 percent decline forecast by economists.
Annually, the number of permits issued fell 12 percent against expectations for a 0.1 percent increase. This followed a 5.3 percent decrease in August.
The Aussie also declined in early deals on speculation that Europe's debt crisis may worsen and signs of slowing global growth.
French President Nicolas Sarkozy and German Chancellor Angela Merkel are holding an emergency meeting today in Cannes, France before the start of the Group of 20 summit, where they will tell Papandreou that there is no alternative to budget cuts imposed in a bailout plan hammered out last week.
The Australian dollar is now worth 81.34 against the Japanese yen, up from yesterday's close of 80.98. If the aussie-yen pair rises further, it may likely target the 83.0 level.
The Australian dollar that closed yesterday's trading at 1.0543 against the Canadian dollar is presently trading at a 2-day high of 1.0585. On the upside, 1.064 is seen as the next target level for the Australian currency.
Against the New Zealand dollar, the Australian dollar is now worth 1.3070, compared to 1.3003 hit late New York Tuesday. The next upside target level for the aussie-kiwi pair is seen at 1.310.
Looking ahead, the final manufacturing PMI reports from major European economies and the German unemployment rate - all for the month of October are slated for release in the coming hours.
(RTTNews) - The U.S. ADP Nation Employment reports, which shed light on non-farm private employment, is expected at 8:15 am ET. The consensus expectations are for an addition of 100,000 jobs by the sector in October following an addition of 91,000 jobs in September.
