Australian, NZ Dollars Strengthen As Commodity Prices Rise

The Australian and New Zealand dollars climbed against their major counterparts in the Asian session on Tuesday, as a weaker dollar supported commodity prices.

The dollar came under pressure following Dallas Fed President Robert Kaplan's comments that a rate hike is unlikely to happen until next year.

Growing hopes that the Fed will tolerate a temporary spike in inflation soothed fears over for a Fed rate hike this year.

Asian shares rose despite the softer cues overnight from Wall Street, as investors focused on reopening of economies such as the U.S. and Europe.

Minutes from the Reserve Bank of Australia's May 4 meeting showed that members of the monetary policy board acknowledged that the country's economic recovery from the Covid-19 pandemic was stronger than expected.

As a result, Australia's forecast for gross domestic product was revised higher.

The aussie advanced to a 6-day high of 0.7808 against the greenback and a 4-day high of 85.15 against the yen, off its early lows of 0.7757 and 84.68, respectively. The aussie is poised to face resistance around 0.80 against the greenback and 88 against the yen.

The aussie reversed from its early low of 1.5652 against the euro and a 5-day low of 0.9357 against the loonie, edging up to 1.5605 and 0.9391, respectively. The next possible resistance for the aussie is seen around 1.53 against the euro and 0.96 against the loonie.

The NZ currency appreciated to a 6-day high of 0.7257 against the greenback, after falling to 0.7197 at 5:30 pm ET. On the upside, 0.74 is likely seen as its next resistance level.

The kiwi rose to 79.14 against the yen and 1.6794 against the euro, following its prior lows of 78.59 and 1.6867, respectively. The currency may possibly challenge resistance around 81.00 against the yen and 1.62 against the euro.

The kiwi recovered to 1.0756 against the aussie, from an early Asian session's low of 1.0775. If the kiwi rises further, 1.06 is likely seen as its next resistance level.

Looking ahead, Eurozone trade data for March and GDP and employment data for the first quarter are set for release in the European session.

U.S. housing starts and building permits for April are due out in the New York session.