Australian, NZ Dollars Advance As Fed Meeting Looms

The Australian and NZ dollars climbed against their major counterparts in the Asian session on Monday, as risk sentiment improved ahead of the U.S. Federal Reserve's policy meeting amid hopes that easy monetary conditions will continue for an extended period.

The Fed is expected to maintain its record low rate and the asset purchase program when it meets later this week.

Investors are pinning hopes that the Fed will reiterate its commitment to ultra-loose policy despite rising inflation.

Leaders of G7 nations vowed to continue their massive economic support programmes "for as long as is necessary" in order to avoid the economic damage caused by an early withdrawal of stimulus.

"We will continue to support our economies for as long as is necessary, shifting the focus of our support from crisis response to promoting growth into the future," the G7 leaders said in a communique on Sunday.

Survey from BusinessNZ showed that New Zealand services index continued to expand in May, albeit at a slower pace, with a Performance of Services Index of 56.1.

That's down from 61.2 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The aussie climbed to 84.65 against the yen, 0.7712 against the greenback and 1.5691 against the euro, reversing from its early lows of 84.44, 0.7694 and 1.5726, respectively. The aussie is seen facing resistance around 86.00 against the yen, 0.79 against the greenback and 1.54 against the euro.

The aussie bounced off to 0.9372 against the loonie, from a low of 0.9356 hit at 11:35 pm ET. Next immediate resistance for the aussie is seen around the 0.96 level.

Recovering from its prior lows of 0.7130 against the greenback and 78.17 against the yen, the kiwi edged up to 0.7147 and 78.44, respectively. The kiwi may challenge resistance around 0.74 against the greenback and 80 against the yen.

The kiwi gained to 1.6930 against the euro and 1.0782 against the aussie, following its previous lows of 1.6980 and 1.0807, respectively. Should the kiwi strengthens further, it is likely to test resistance around 1.66 against the euro and 1.06 against the aussie.

Looking ahead, Eurozone industrial production for April will be released in the European session.

Canada manufacturing sales for April are scheduled for release in the New York session.