Forex News: Australian Dollar Rises After PBoC Rate Decision

Australian Dollar Rises After PBoC Rate Decision

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Monday, after China maintained its benchmark interest rates for the seventh straight month, as widely expected.

The People's Bank of China left its one-year loan prime rate unchanged at 3.0 percent on Monday. Likewise, the five-year LPR, the benchmark for mortgage rates, was retained at 3.50 percent.

For hints about the Reserve Bank of Australia's (RBA) policy outlook and its evaluation of inflationary pressures, traders will probably concentrate on the RBA's meeting minutes, which are forthcoming on Tuesday.

At the upcoming RBA Board meeting, investors wager on a 27% chance of a rate increase to 3.85%.

Additionally, Asian stock markets traded higher, boosted by sharp gains in technology shares which mirrored their peers on the tech-heavy Nasdaq amid solid earnings news and easing concerns of a tech bubble. Optimism about more monetary easing by the US Fed following soft inflation data continues to lift the markets.

Gains across most other sectors led by mining and technology stocks, also led to the upturn of Asian shares.

Crude oil prices increased amid concerns of a supply side disruption due to brewing U.S.-Venezuela tensions. West Texas Intermediate crude for January delivery was up by $0.47 or 0.84 percent at $56.62 per barrel.

In the Asian trading today, the Australian dollar rose to a 4-day high of 0.6629 against the U.S. dollar, from Friday's closing value of 0.6612. The aussie may test resistance near the 0.67 region.

Against the euro and the Canadian dollar, the aussie advanced to 6-day highs of 1.7680 and 0.9144 from last week's closing quotes of 1.7710 and 0.9126, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.74 against the euro and 0.92 against the loonie.

The aussie edged up to 104.32 against the yen, from a recent low of 104.08. On the upside, 105.00 is seen as the next resistance level for the aussie.

Looking ahead, Canada PPI data and raw material prices for November and U.S. Chicago Fed national activity index for September, are due to be released in the New York session.

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