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Australian Dollar Advances On Fed Powell's Less Hawkish Comments


The Australian dollar climbed against its most major counterparts in the Asian session on Thursday, as U.S. Federal Reserve Chair Jerome Powell reiterated that the central bank would moderate the pace of rate increases as soon as December.

Powell struck a dovish tone than expected and stressed that a slowdown in the pace of rate hikes would be appropriate at the meeting in December.

“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” Powell said in a speech at the Brookings Institution in Washington.

“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” Powell noted.

Asian markets are mostly higher, as hopes for a 50 basis-point rate hike at the December meeting intensified after Powell’s remarks.

The aussie firmed to 1.5289 against the euro, its highest level since November 16. The aussie is seen finding resistance around the 1.49 level.

The aussie recovered to 1.0787 against the kiwi, from an 8-day low of 1.0748 set at 10:25 pm ET. If the aussie rises further, 1.09 is possibly seen as its next resistance level.

The aussie strengthened to a 2-1/2-month high of 0.6840 against the greenback and near a 7-month high of 0.9163 against the loonie, off its previous lows of 0.6781 and 0.9099, respectively. The next possible resistance for the aussie is seen around 0.70 against the greenback and 0.94 against the loonie.

In contrast, the aussie fell against the yen, with the pair trading at 92.89. The aussie is likely to find support around the 90.00 level.

Looking ahead, PMI reports from major European economies are due in the European session.

U.S. weekly jobless claims for the week ended November 26, ISM manufacturing index for November and personal income and spending data and construction spending for October will be out in the New York session.

*Spain Nov Factory PMI 45.7 Vs. 44.7 In Oct, Consensus 45.6

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*Czech Nov S&P Global Maufacturing PMI 41.6 Vs. 41.7 In October

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