Forex News: Australian Dollar Rises Amid Risk-on Sentiment, China Data

Australian Dollar Rises Amid Risk-on Sentiment, China Data

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Thursday, as Asian shares traded higher, amid hopes a fresh round of negotiations between Iran and the U.S. this week will help resolve the ongoing conflict in the Middle East. The continuing drop in crude oil prices amid hopes of the potential opening of the Strait of Hormuz also aided market sentiment.

Reports indicated that Tehran could consider allowing free passage for ships via the Omani side of the Strait of Hormuz if a deal is reached to prevent renewed escalation.

In an interview with Fox Business, President Donald Trump expressed confidence the war is "very close to over" and reiterated his claim that Iran wants to make a deal "very badly."

Trump also predicted that the "stock market is going to boom" when the conflict between the U.S., Israel and Iran is finally over.

China's economy grew more than expected in the first quarter but the war in the Middle East darkens prospects due to supply side shocks and its heavy reliance on energy imports.

Gross domestic product expanded 5.0 percent on a yearly basis in the first quarter, the National Bureau of Statistics reported Thursday. The annual growth exceeded the prior quarter's 4.5 percent expansion and also economists' forecast of 4.8 percent.

The economy remains on track to achieve government's 4.5 percent to 5 percent target this year.

On a quarterly basis, GDP gained 1.3 percent but slightly weaker than the expected expansion of 1.4 percent.

Industrial production growth eased to 5.7 percent in March from 6.3 percent in January and February. The rate also remained below forecast of 5.4 percent.

Similarly, retail sales grew at a slower pace of 1.7 percent year-on-year in March, compared to January to February period's 2.8 percent expansion. Economists had anticipated a 2.4 percent rise.

In the first quarter, fixed asset investment posted an expansion of 1.7 percent after rising 1.8 percent in the January to February period. Property investment declined 11.2 percent.

The urban unemployment rate rose unexpectedly to 5.4 percent in March from 5.3 percent in February. The rate was forecast to ease to 5.2 percent.

In economic news, data from the Australian Bureau of Statistics showed that the unemployment rate in Australia came in at a seasonally adjusted 4.3 percent in March, unchanged and in line with expectations.

The Australian economy added 17,900 jobs last month, shy of expectations for a gain of 19,100 following the gain of 48,900 in the previous month.

The participation rate slipped to 66.8 percent from 68.9 percent a month earlier. Unemployed people decreased by 100 to 655,600, while youth unemployment climbed to 10.1 percent.

Crude oil prices edged higher as traders weighed the prospects of success in the upcoming U.S-Iran talks against the ongoing U.S. blockade on all Iranian ports across the Strait of Hormuz, which is keeping the supply concerns alive. West Texas Intermediate crude for May was up $0.36 or 0.39 percent at $91.64 per barrel.

In the Asian trading today, the Australian dollar rose to a 36-year high of 114.21 against the yen, from yesterday's closing value of 113.96. The next possible upside target for the aussie is seen around the 115.00 region.

Against the Canada and the U.S. dollars, the aussie advanced to a 5-year high of 0.9869 and nearly a 4-year high of 0.7198 from Wednesday's closing quotes of 0.9852 and 0.7176, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.99 against the loonie and 0.72 against the greenback.

Against the euro and the NZ dollar, the aussie advanced to nearly a 4-week high of 1.6417 and an 8-day high of 1.2159 from Wednesday's closing quotes of 1.6457 and 1.2138, respectively. The aussie may test resistance around 1.61 against the euro and 1.23 against the kiwi.

Looking ahead, Eurozone CPI data for March is due to be released at 5:00 am ET in the European session.

In the New York session, U.K. NIESR Monthly GDP Tracker for March, ECB monetary policy meeting accounts, U.S. Weekly jobless claims data, U.S. Philadelphia Fed manufacturing index for April and U.S. industrial production for March are slated for release.

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