Australian Dollar Climbs Amid Risk Appetite

The Australian dollar strengthened against its key counterparts in early European deals on Tuesday, as European stocks advanced on the back of higher commodity prices, and signs of stability in Chinese shares.

Oil crept higher following Monday’s 3 percent loss. Investors now await this week’s oil inventories data for further direction.

Gold recovered, as investors bet the Fed Reserve may embark a ‘gradual’ tightening cycle, after raising interest rates by 25 basis points at its latest meeting.

Chinese stocks stablized after tumbling 2.6 percent on Monday. Investor confidence was bolstered after lawmakers approved a proposal to reform stock listings and the People’s Bank of China said it would “flexibly” use various policy tools to maintain appropriate liquidity and keep the yuan stable.

The German DAX rallied 1.5 percent and France’s CAC 40 was moving up 1.3 percent. The U.K.’s FTSE 100 was 0.6 percent higher.

The currency has been moderately higher in Asian deals, amid rising risk appetite.

The aussie spiked up 1.0118 against the loonie for the first time since September 2014. Continuation of the aussie’s uptrend may take it to a resistance around the 1.025 region.

Moving away from an early 6-day low of 87.22 against the yen and a 5-day low of 0.7245 against the U.S. dollar, the aussie advanced to 87.61 and 0.7280, respectively. The next possible resistance levels for the aussie are seen around 89.00 against the yen and 0.735 versus the greenback.

The aussie recovered to 1.5080 versus the euro, from a low of 1.5137 hit at 5:30 pm ET. The aussie is likely to find resistance around the 1.48 mark.

Data from Destatis showed that Germany’s core and extra budgets of overall public budget showed a financial surplus of EUR 3.9 billion in the first three quarters of 2015.

In the same period of last year, the overall public budget showed a cash deficit of EUR 20.8 billion.

Bouncing off from an early nearly 2-month low of 1.0567 against the kiwi, the aussie edged up to 1.0594. If the aussie extends uptrend, 1.07 is possibly seen as its next resistance level.

Looking ahead, advance U.S. goods trade balance for November, U.S. S&P/Case-Shiller home price index for October and U.S. consumer confidence index for December are due to be released in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com

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