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Australian Dollar Strengthens Against Most Majors

The Australian dollar edged higher against its major counterparts on Wednesday morning in Asia as a rally in Asia-pacific equities boosted demand for high-yielding currencies.

Asia-Pacific stocks outperformed today thanks to some decent earnings news from the U.S. However, traders adopted a cautious stance ahead of the U.S. FOMC rate decision and GDP data, which are due out later in the day.

In economic news, an indicator of online job vacancies in Australia declined in December, data published by the Department of Education, Employment and Workplace Relations (DEEWR) showed today.

On a seasonally adjusted basis, the Internet Vacancy Index decreased 2.3 percent month-on-month, The trend estimate showed a monthly fall of 2.8 percent.

The Australian dollar touched 95.37 against the yen, its strongest level since August 2008. The AUD/JPY pair may extend uptrend beyond the 100 mark given the technical picture of the currency cross and Japan's recent efforts of keeping their currency weaken. The near-term resistance zone for the aussie-yen pair is seen around the 95.90/96.0 area.

Retail sales in Japan were up a seasonally adjusted 0.1 percent in December, the Ministry of Economy, Trade and Industry said today, worth 13.098 trillion yen. That missed forecasts for an increase of 0.4 percent following the downwardly revised 0.1 percent contraction in November.

On a yearly basis, retail sales were up 0.4 percent - beating forecasts for a gain of 0.3 percent after adding a downwardly revised 1.2 percent in the previous month.

The Australian dollar challenged yesterday's 5-day peak against the US dollar, rising as high as 1.0477 from a low of 1.0459. The next barrier for the aussie-greenback pair is seen at 1.0490/1.05.

The Australian dollar also drifted higher to 1.2513 against the New Zealand dollar from yesterday's closing quote of 1.2483. The technical picture, however, shows the bearish extension of the pair towards the key support line near the 1.2440 level.

The number of building permits issued in New Zealand rebounded in December, data from Statistics New Zealand showed today. Permits issued for buildings, including apartments, climbed 9.4 percent month-on-month on a seasonally adjusted basis. This followed a 5.2 percent fall in November. Consents for non-apartment houses decreased 1 percent in December.

The Australian dollar erased some of its early Asian session losses against the euro in mid-morning trading, rising as high as 1.2885 from a low of 1.2903. If the aussie extends advance, likely resistance level is seen around the 1.28 area.

Traders await the eurozone consumer confidence report for January in the European session, which may affect the EUR/AUD deals in the succeeding session.

The US ADP employment, GDP and the FOMC rate decision are the key data to watch in the North American session.

Also, the Reserve Bank of New Zealand will announce the rate decision later today. Economists expect the RBNZ to leave the benchmark interest rate unchanged at 2.5 percent.

by RTTNews Staff Writer

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