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Forex - Aussie and kiwi rise vs. greenback on oil rebound

Published 25/05/2016, 04:14 pm
© Reuters.  Aussie, kiwi move higher after mixed data, oil rally supports
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Investing.com - The Australian and New Zealand dollars rose against their U.S. counterpart on Wednesday, after mixed economic reports from Australia and New Zealand, as a fresh rally in oil prices boosted the commodity currencies.

AUD/USD gained 0.35% to 0.7206, easing off Tuesday’s a nearly three-month low of 0.7146.

The Australian Bureau of Statistics reported on Wednesday that construction work done declined by 2.6% in the first quarter, compared to expectations for a 1.5% fall. Construction work done dropped 2.9% in the last quarter of 2015, whose figure was revised from a previously estimated 3.6% slide.

NZD/USD added 0.24% to trade at 0.6754, pulling away from Tuesday’s two-month trough of 0.6705.

Also Wednesday, Statistics New Zealand said the trade surplus widened to NZ$292 million in April from NZ$117 million the previous month. Analysts had expected the trade surplus to narrow to NZ$60 million last month.

Separately, the commodity currencies were boosted by a rally in oil prices after the American Petroleum Institute said on Tuesday that U.S. crude stocks dropped by 5.1 million barrels to 536.8 million last week.

The greenback’s losses were limited however, as upbeat housing sector data on Tuesday added to expectations for a June rate hike by the Federal Reserve.

The U.S. Commerce Department said new home sales rose by 16.6% to 619,000 units last month, compared to expectations for a 2.0% increase.

The data came after St. Louis Fed President James Bullard said Monday that more factors favored a gradual rate increase versus keeping them steady.

Separately, San Francisco Fed President John Williams said he still sees the central bank raising interest rates two to three times this year.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.56, near the previous session’s seven-week peak of 95.66.

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