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Aussie dollar rebounds on firmer commodity prices

7/12/2017, 11:31:03 AMMarket Analysis
Aussie dollar rebounds on firmer commodity prices

The yen continued to rebound on Wednesday while the Chinese yuanstayed along a very slight downward path against the USD while the Australian dollar rallied thanks to firmer commodity prices.

Political concerns in the US may also be hitting the dollar, with the U.S. dollar index, which measures the greenbackís strength against a trade-weighted basket of six major currencies, down 0.08% to 95.41 in mid-morning in Asia. Last week, the dollar rose against a basket of the other major currencies after data showed the U.S. economy added 222,000 jobs last month, more than expected, and figures for April and May were also revised upwards.

In the days ahead, investors will focus on Fed Chair Janet Yellen's testimony on monetary policy as well as U.S. data on inflation and retail sales, due out on Friday, and trade data from China on Thursday. Japan is also expected to release PPI data. The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has raised doubts over whether officials will be able to stick to their planned tightening path.

Stronger iron ore prices helped lift the Australian dollar aginst the USD 0.25% by mid-morning to 0.7658.

The Japanese yen continued to rebound against the USD. At mid-morning in Asia, the USD/JPY pair was down 0.41% to JPY113.47, marking a recovery for the yen from multi-month lows.

The People's Bank of China set the reference rate, around which the currency is allowed to fluctuate by 2%, at CNY6.7901, down from the close of CNY6.8025. As of mid-morning, the CNY was down 0.15% against the USD to 6.7906.