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FOREX-Oil gains help Aussie, kiwi after Fed statement

Published 28/01/2016, 11:50 pm
FOREX-Oil gains help Aussie, kiwi after Fed statement
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(Adds franc, sterling, more quotes)

* Aussie up almost 0.8 pct as oil tops $33

* BOJ in focus, market see almost 50 pct chance of easing

* RBNZ opens door to rate cut, hampers kiwi gains

* Swiss franc hits 1-year lows

By Patrick Graham

LONDON, Jan 28 (Reuters) - Commodity-linked major currencies including the Australian and New Zealand dollars gained on Thursday as oil rose back above $33 a barrel to its highest levels in almost three weeks.

A mixed performance for other majors after Wednesday's Federal Reserve statement saw the dollar trade lower against the euro EUR= and marginally higher against the yen JPY= while losing almost half a percent to sterling. GBP=

That also came after a brief boost for the yen from the resignation of Japan's Economy Minister Akira Amari following a row over allegations that he had received bribes from a construction company. Aussie gained 0.6 percent to $0.7069 after touching a three-week high of $0.7091.

The New Zealand dollar was a third of a percent higher, held back by signals from its central bank that further easing of interest rates may be required in the face of a poorer global economic outlook.

"The kiwi clearly underperformed after the Reserve Bank meeting overnight," said Richard Benson, co-head of portfolio management at currency fund Millennium in London.

"Stocks did end down in the U.S. but there are other more bullish signals. Oil is back above $33, the U.S. 10-year yield is above 2 percent. The Aussie and New Zealand dollars have held up well."

A renewed slide in oil prices, together with concerns over China, has been at the heart of a deepening global sell-off on stock markets since the first week of January.

That had knocked the Aussie back by as much as 6 percent since the start of January but it has halved those losses in the past 10 days.

With a broadly steady message from the Fed out of the way, the Bank of Japan is the next big focus on Friday morning, with traders saying markets were factoring in up to a 50 percent chance of more measures to ease monetary policy.

"It is a tricky situation. If they don't ease, the yen will strengthen and stocks will fall. But even if it does something, the impact may (only) last a week or so," said Masatoshi Omata, senior client manager at Resona Bank.

"But after that, markets could start to worry whether its monetary stimulus is really working."

Sterling inched higher after quarterly economic growth came in in line with forecasts at 0.5 percent. Dealers said there had been substantial flows in both directions over sterling in the last few days as more funds positioned for the chance that Britain could vote to leave the European Union later this year.

The Swiss franc's slide to its lowest since the aftermath of last year's removal of the Swiss National Bank's ceiling on the currency prompted a fresh round of chatter over the scale of official intervention.

"Whenever there are periods of elevated risk aversion the risk of the SNB limiting franc upside is there," Credit Agricole (PA:CAGR) strategist Manuel Oliveri told Reuters' Global Market Forum.

"However we must note too that the central bank can be happy how the franc is trading against the euro at the moment."

(Editing by Gareth Jones)

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