The two individual currencies yen and Australian dollars edged past the U.S. dollars on Wednesday. The possible reason for this was that Tuesday’s downbeat U.S. data continued to weigh on the greenback as it showed a drop in U.S. nonfarm productivity by 0.5% in the second quarter, disappointing expectations for a 0.4% rise after a 0.6% slip in the three months since March. Investors also eye the upbeat machinery orders noted in Japan and improved consumer sentiment in Australia.
AUD/USD gained its highest at 0.7694 since May 3, up 0.27%. This advance to a 3-month peak was after Glenn Stevens, Reserve Bank of Australia Governor, stated that there were low chances that the central bank would take unconventional measures such as negative rates. The bank preferred to retain the 2% or 3% current inflation target, he added. Venturing to go over the 0.7700 handle, the Aussie now trades 0.4% at 0.7704. Australia’s consumer confidence for August rose by 2% against previous -3%, according to data released earlier. On the other hand, investment lending for homes in June came in at 3.2%, as compared to the prior 3.9%. Markets now await Australia’s consumer inflation expectation figures and the U.S. economic data for further momentum. The prompt resistance is a break above the targets of 0.7765, at 0.7729, while the lower side support is a break below targets 0.7622/0.7600, at 0.7653.
Elsewhere, USD/JPY changed hands at 101.33, down 0.54%. It was underpinned by better-than-expected Japanese core machinery orders and tertiary index for the month of June, which jumped to 8.3% and 0.8%, respectively, surpassing projections and previous readings. The greenback extended losses, pulling further away from a 1-week high first touched on Monday, and it continues to decline as markets do not expect the Fed to hike this year, strengthening the bid tone around the Japanese yen. Yen’s immediate support is located at 100.74; break below could drag it near 100.52/100.20. On the higher side, resistance is seen at 10.2.52, break above targets 103.00.
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