Antipodean Currencies Rise Amid Risk-on Mood; Yen Slides

(RTTNews) - The antipodean currencies such as the Australia and the New Zealand dollars strengthened against their major currencies in the Asian session on Tuesday, as Asian markets traded higher following Trump's softened stance on tariff hikes.

U.S. President Donald Trump imposed new tariff rates on partners including Japan and South Korea but left the door open for additional negotiations, saying that the earlier notifications were "not 100 percent firm."

With the deadline for increased duties pushed off until at least Aug. 1, there are mild hopes for deals over punishing tariffs.

Meanwhile, the Trump administration has offered the European Union a proposal that would keep a 10 percent baseline tariff on all EU goods, with some exceptions for sensitive sectors such as aircraft and spirits, media reports suggest.

The AUD and NZD traded higher against their major rivals in the Asian trading, after the Reserve Bank of Australia maintained its benchmark rate, defying expectations for a quarter-point rate cut.

The policy board, governed by Michele Bullock, decided to maintain the cash rate target at 3.85 percent.

The current rate was the lowest in two years. Previously, the bank had reduced the rate by 25 basis points in May and February.

Investors also anticipate that the Reserve Bank of New Zealand (RBNZ) will maintain the OCR at 3.25 percent in its monetary policy on Wednesday.

Crude oil prices edged higher, shrugging off oversupply concerns triggered by OPEC's decision to accelerate its production increase starting in August. West Texas Intermediate crude for August delivery rose $0.93 to settle at $67.93 per barrel.

In the Asian trading today, the Australian dollar rose to nearly a 4-month high of 95.70 against the yen, from yesterday's closing value of 94.92. The aussie may test resistance around the 96.00 region.

Against the U.S. dollar and the euro, the aussie advanced to 4-day highs of 0.6558 and 1.7917 from Monday's closing quotes of 0.6506 and 1.8039, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.66 against the greenback and 1.76 against the euro.

Against the Canada and the New Zealand dollars, the aussie jumped to 5-day highs of 0.8944 and 1.0876 from yesterday's closing quotes of 0.8891 and 1.0831, respectively. On the upside, 0.90 against the loonie and 1.09 against the kiwi are seen as the next resistance levels for the aussie.

The NZ dollar rose to nearly a 6-month high of 88.07 against the yen and a 4-day high of 1.9469 against the euro, from yesterday's closing quotes of 87.64 and 1.9537, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 89.00 against the yen and 1.91 against the euro.

Against the U.S. dollar, the kiwi edged up to 0.6036 from Monday's closing value of 0.6008. On the upside, 0.61 is seen as the next resistance level for the kiwi.

Meanwhile, the safe-haven Japanese yen weakened against their major currencies in the Asian session, as Asian stock markets traded higher following Trump's softened stance on tariff hikes.

The yen fell to a record low of 183.59 against the Swiss franc, nearly a 1-year low of 171.81 against the euro and more than a 8-month low of 199.48 against the pound, from yesterday's closing quotes of 183.00, 171.22 and 198.75, respectively. If the yen extends its downtrend, it is likely to find support around 184.00 against the franc, 173.00 against the euro and 201.00 against the pound.

Against the U.S. and the Canadian dollars, the yen dropped to more than 2-week lows of 146.45 and 107.19 from Monday's closing quotes of 145.88 and 106.76, respectively. The yen is likely to find support around 148.00 against the greenback and 108.00 against the loonie.

Looking ahead, U.S. Redbook report, Canada Ivey PMI for June and U.S. consumer inflation expectations for June are slated for release in the New York session.