The Australian dollar clung to support just under 77 US cents on Tuesday ahead of a speech by the Australian central bank governor later in the day, after retreating from its highest level since early March. The Aussie earlier spurted around quarter of a cent higher during offshore and early local trade to 77.38 cents, according to Reuters data, remaining in favour despite the US dollar correcting against the majors after its recent steep downtrend.
Still, a speech by Reserve Bank of Australia Governor Ian Macfarlane to the Committee for Economic Development of Australia at 7:15 pm (0815 GMT) on "Monetary Policy and Financial Stability" could steer the Aussie in the near term.
Wages data on Wednesday will also be closely watched in the light of last week's data that showed an ever-tightening labour market.
HSBC chief economist John Edwards said the wages data would be a "key test of the RBA's serenity".
The AUD was $0.7697/7702 compared with $0.7693/98 late here on Monday, and after finding support at April's breached double-top of 76.90 cents.
The AUD, supported by base metal and gold prices and rising domestic bond yields, looks primed to extend the rally to its February 7-year peak of 80.05 cents as technical barriers continue to offer little resistance.
In the RBA's quarterly statement last Monday it said there was no pressing need to raise interest rates, but still expected to tighten policy in the current economic expansion.
Since then data has shown business conditions remaining robust, consumer confidence at a fresh 10-year high and unemployment dropping to 5.3 percent, only a notch above the all-time low of 5.2 percent in 1977.
Greg Gibbs, senior currency strategist at RBC Capital Markets also expects the governor to field questions on the Aussie.
"Unlike the RBNZ (Reserve Bank of New Zealand), the RBA has tended to be more reluctant to talk the AUD lower, and it would be difficult for Macfarlane to say the AUD is unfairly valued," Gibbs said.
The market is wary of the outcome of a meeting of European finance ministers in Brussels given European concerns over the strength of the euro on a downtrend in the USD.
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