CANBERA (dpa-AFX) - The antipodean currencies such as the Australia and the New Zealand dollars strengthened against their major counterparts in the European session on Thursday, after reports emerged that the U.S. and EU are edging closer to a trade deal.
Concerns eased about a global tariff war after U.S. President Donald Trump confirmed major trade deals with Japan and the Philippines, which spurred expectations of further trade agreements as the August 1 deadline nears.
A possible deal would result in a broad 15 percent tariff on EU goods imported into the U.S., avoiding a harsher 30 percent levy slated to be implemented from August 1, two EU diplomats said.
Traders also cheered comments from U.S. Treasury Secretary Scott Bessent backing U.S. Fed Chair Jerome Powell. The Fed seems unlikely to cut interest rates in the near future, as recent economic data revealed a stable US job market and decent US retail sales.
German Chancellor Friedrich Merz has said that negotiations over a long-running trade dispute are making progress.
Commerce Secretary Howard Lutnick said Japan's pledge of billions in U.S. investments 'could be' a model for the EU.
U.S. President Donald Trump said at an AI event in Washington that the new rates will not go below 15 percent and could go as high up to 50 percent.
In economic news, data from S&P Global showed that the manufacturing sector in Australia continued to expand in July, with a manufacturing PMI score of 51.6. That's up from 50.6 in June.
The survey also showed that the services PMI improved to 53.8 in July from 51.8 in June, and the composite PMI moved to 53.6 from 51,6 a month earlier.
In the European trading today, the Australian dollar rose to a 3-day high of 96.77 against the yen, from an early low of 96.40. The aussie may test resistance around the 98.00 region.
Against the U.S. and the Canadian dollars, the aussie advanced to an 8-1/2-month high of 0.6625 and a 10-day high of 0.9008 from early lows of 0.6597 and 0.8975, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.67 against the greenback and 0.91 against the loonie.
Against the euro and the NZ dollar, the aussie edged up to 1.7776 and 1.0938 from early lows of 1.7839 and 1.0913, respectively. On the upside, 1.76 against the euro and 1.10 against the kiwi are seen as the next resistance levels for the aussie.
The NZ dollar rose to more than a 2-week high of 0.6060 against the U.S. dollar, from an early low of 0.6042. The next resistance level for the kiwi is seen around the 0.61 region.
Against the yen and the euro, the kiwi advanced to 88.55 and 1.9432 from early lows of 88.29 and 1.9475, 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.
Looking ahead, PMI reports from Eurozone and U.K. for July and U.K. CBI business optimism index for the third quarter are set to be released in the European session.
In the New York session, Canada retail sales for May, manufacturing sales data in June, U.S. weekly jobless claims data, new home sales data for June, U.S. S&P Global PMI reports for July and U.S. Kansas Fed composite and manufacturing indices for July are slated for release in the New York session.
At 8:15 am ET, the European Central Bank announces its monetary policy decision. Markets expect the ECB to hold the deposit facility rate at 2.00 percent after cutting it by a quarter basis points each in every rate-setting session since September.
Following the governing council meeting in Frankfurt, ECB Chief Christine Lagarde holds press conference at 8:45 am ET.
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