The Australian dollar edged higher against its major counterparts in the European session on Friday amid risk appetite as US bond yields plunged across Europe, despite signs of rising US inflation.
Investors are hoping that rising price pressures will be temporary and that the Federal Reserve is unlikely to drop monetary support anytime soon.
Investors are awaiting the Federal Reserve’s monetary policy meeting next week to get more information on the state of the economy and the outlook for economic policy.
Traders were also relieved after no new cases of coronavirus were reported in Australia’s second-most populous state, Victoria, on the day isolation ended in the Melbourne area.
The Australian dollar reversed from its early lows of 1.0763 against the kiwi and 1.5731 against the euro, climbing to 3-week highs of 1.0796 and more than 3-week highs of 1.5659, respectively. The Australian dollar is likely to break resistance at 1.09 against the kiwi and 1.54 against the euro.
The Australian dollar hit more than 2-week highs of 0.7776 against the dollar and 0.9393 against the Canadian dollar, up from previous lows of 0.7745 and 0.9367, respectively. If the Australian dollar continues to rise, 0.80 and 0.95 are likely to be its next resistance levels against the US dollar and the Canadian dollar, respectively.
The Australian dollar climbed to a 9-day high of 85.05 against the yen from a low of 84.69 at 5:00 pm ET. On the other hand, 88.00 is likely to be the next resistance level.
Looking ahead, the preliminary June US Consumer Sentiment Index will be released at the New York session.
The material is provided by InstaForex – www.instaforex.com.