Antipodean Currencies Rise Amid Risk Appetite

The Antipodean currencies such as Australia, the New Zealand and the Canadian dollars strengthened against their major currencies in the Asian session on Thursday amid risk appetite, as traders react to a key U.S. inflation report that showed a bigger than expected increase in core inflation, raising expectations for a quarter-point rate cut at the U.S. Fed's monetary policy meeting next week.

The data seemingly reduced the chances of the Fed cutting interest rates by 50 basis points but is still expected to continue lowering rates in the coming months.

Following the report, CME Group's FedWatch Tool is indicating an 83% chance of a quarter point rate cut and just a 17% percent chance of a half-point rate cut.

Gains across most sectors led by mining and technology stocks, also led to the upturn of investor sentiment.

Crude oil prices surged higher, recovering from a three-year low in the previous session thanks to fears of prolonged production shutdowns in the offshore oil patch due to Hurricane Francine. West Texas Intermediate Crude oil futures for October ended up by $1.56 or 2.37 percent at $67.31 a barrel.

In the Asian trading today, the Australian dollar rose to a 2-day high of 95.67 against the yen, from yesterday's closing value of 95.00. The aussie may test resistance around the 98.00 region.

Against the New Zealand and the U.S. dollars, the aussie advanced to a 9-day high of 1.0894 and a 6-day high of 0.6695 from Wednesday's closing quotes of 1.0875 and 0.6672, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.09 against the kiwi and 0.68 against the greenback.

Against the euro and the Canadian dollar, the aussie climbed to 6-day highs of 1.6458 and 0.9084 from yesterday's closing quotes of 1.6496 and 0.9059, respectively. The next possible upside target for the aussie is seen around 1.62 against the euro and 0.91 against the loonie.

The NZ dollar rose to a 6-day high of 1.7898 against the euro, from yesterday's closing value of 1.7942. On the upside, 1.76 is seen as the next resistance level for the kiwi.

Against the U.S. dollar and the yen, the kiwi advanced to 2-day highs of 0.6159 and 87.97 from Wednesday's closing quote of 0.6136 and 87.35, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.63 against the greenback and 90.00 against the yen.

The Canadian dollar rose to a 6-day high of 1.4937 against the euro, from yesterday's closing value of 1.4946. The loonie is likely to find resistance around the 1.48 region.

Against the yen and the U.S. dollar, the loonie advanced to 2-day highs of 105.44 and 1.3564 from Wednesday's closing quotes of 104.85 and 1.3571, respectively. If the loonie extends its uptrend, it is likely to find resistance around 109.00 against the yen and 1.34 against the greenback.

Looking ahead, the European Central Bank is slated to announce the outcome of its policy meeting in Frankfurt at 8.15 am ET. The central bank is widely expected to cut its key interest rates by 25 basis points amid falling inflation and economic indicators signaling a weaker outlook.

Following the monetary policy decision, the ECB Chief Christine Lagarde will hold the press conference at 8.45 am ET.

In the New York session, Canada building permits for July, U.S. PPI for August, weekly jobless claims, U.S. Federal Reserve's budget statement for August and U.S WASDE report are slated for release.