Forex Market: Aussie and Greenback Gains Strength

Forex Market: Aussie and Greenback Gains Strength
Forex Market: Aussie and Greenback Gains Strength

The Monday trading session saw the Australian dollar rallying over the U.S. dollar, even as the traders are keeping a close watch on the upcoming policy meeting slated for Wednesday.

The AUD/USD witnessed a surge of 0.53% to trade at 0.9642 to post the highest mark late Asian session, and finally consolidated at 0.9623. As per the analysts, the duo was supposed to gain strength at 0.9430 and face resistance at 0.9760, the low and high of June 13 and June 4, respectively.

The USD showed a downward trend last week amidst concerns that the Federal Reserve Bank will scale off the bond purchasing program during the course of this year. Moreover, traders were also awaiting the rate statement of Central Bank, which is due to release on Wednesday.

The official data about the new motor vehicle sales released by the Australian Bureau of Statistics showed slight rise to a seasonally adjusted 93209 in the month of May after it dropped by 1.7% in the preceding month. The AUD/JPY rallied by 0.76% to trade at 90.85.

The EUR/AUD pair dropped by 0.63% to trade at 1.3851, showing the Aussie weighing over the Euro. The two day summit to be held by G8 group in Northern Ireland will start later today.

Coming to the currency of the world’s biggest economy, the greenback rallied over the Japanese yen during Asian trading session on Monday, ahead of the revelation of tertiary industry data.

In Asian trading Monday, the USD/JPY posted a hike of 0.44% to trade at 94.60, with the earlier sessions saw it hit 94.78 and 94.12, the highest and lowest mark respectively. It was predicted that the pair would resist at 96.09 and strengthen at 92.72, the high and low of Thursday and April 4.

The yen registered the highest surge against the greenback and the euro in several months, after the Japanese equities saw a sharp decline following the Bank of Japan’s meager efforts to ease market volatility. Combined with the concern that Fed is likely to peter out the bond purchasing program worth USD85 billion a month, investors were prompted to sell off the risky assets to a large extent.