CANBERA (dpa-AFX) - The antipodean currencies such as the Australia and the New Zealand dollars strengthened their major currencies in the Asian session on Friday amid increased risk-on mood by the investors, as weaker than expected U.S. consumer price inflation and producer price inflation data as well as recent downbeat monthly jobs data have reinforced expectations of a U.S. Fed rate cut at next week's meeting.
Following the reports, CME Group's FedWatch Tool is currently indicating 92.5 percent chance the Federal Reserve will lower rates by a quarter-point next week and a slim 7.5 percent chance of a half- point rate cut.
Traders also ramped up bets for 125 bps of rate cuts over the next five FOMC meetings to support a deteriorating job market.
The recent strong Australian economic data diminished the likelihood of additional Reserve Bank of Australia (RBA) rate cuts, also led to the upturn of AUD, with a currently pricing in an over 86% chance of unchanged policy in September.
Traders also await the release of the U.S. University of Michigan (UoM) Consumer Sentiment Index due later in the day.
In the Asian trading today, the Australian dollar rose to nearly an 8-month high of 98.29 against the yen and a 3-month high of 1.7592 against the euro, from yesterday's closing quotes of 98.14 and 1.7603, respectively. If the aussie extends its uptrend, it is likely to find resistance around 99.00 against the yen and 1.73 against the euro.
Against the U.S. and the Canadian dollars, the aussie advanced to more than a 10-month high of 0.6669 and a 10-month high of 0.9227 from early lows of 0.6656 and 0.9214, respectively. The aussie may test resistance around 0.68 against the greenback and 0.93 against the loonie.
The aussie edged up to 1.1160 against the NZ dollar, from Thursday's closing value of 1.1147. On the upside, 1.13 is seen as the next resistance level for the aussie.
The NZ dollar rose to near 1-mont highs of 88.00 against the yen and 1.9625 against the euro, from yesterday's closing quotes of 88.00 and 1.9652, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 89.00 against the yen and 1.94 against the euro.
Against the U.S. dollar, the kiwi edged up to 0.5979 from a recent low of 0.5967. The next possible upside target for the kiwi is seen around the 0.60 region.
Looking ahead, Canada building permits for July and capacity utilization for the second quarter, U.S. University of Michigan's consumer sentiment data for September, U.S. WASDE report and U.S. Baker Hughes oil count data are slated for release in the New York session.
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