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Aussie supported by oil prices

Monday, Sep 19 2016

Commodity-linked currencies such as the Australian and New Zealand Dollars posted solid gains on Monday, supported by a weaker U.S. Dollar and a surge in crude oil prices.  Position-squaring ahead of the Fed’s interest rate announcement on Wednesday, helped pressure the U.S. Dollar. Reduced expectations that the Fed would raise rates also weighed on the Greenback. According to the CME Group’s Fed Watch program, traders are saying there is a 15 percent chance of a Fed rate hike in September and a 50 percent chance of a December rate hike.

Higher crude oil prices drove up overall demand for higher-yielding assets which helped underpin demand for the Aussie and Kiwi. Crude was supported by talk that OPEC and other major oil producers were close to agreeing on either a production freeze or an output reduction. Additionally, a delay in Libya’s plans to begin exporting crude also provided support for crude.

 

Aussie is currently being traded around 0.7530 area. Pair is likely to find support around 0.75 and resistance above 0.7580 handle. 

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