Australian Dollar Rises As Upbeat PMI Signals RBA Rate Hike

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Friday, as the Australia's robust PMI data signaled the Reserve Bank of Australia's (RBA) to be likely tighter monetary policy.

Data from S&P Global showed that the manufacturing sector in Australia continued to expand in January, and at a faster pace, with a manufacturing PMI score of 52.4. That's up from 51.6 in December.

The report also showed that the services PMI improved to 56.0 from 51.1 a month earlier and the composite PMI climbed to 55.5 from 51.0.

Asian stocks traded higher after U.S. stocks advanced for a second consecutive session on easing geopolitical and trade tensions between the United States and Europe.

After negotiating a framework agreement with NATO for a potential future accord on Greenland, US President Donald Trump changed his stance.

Gold held firm above $4,950 per ounce, setting a new record high as the dollar index held losses after falling the most in a month during the New York session.

Oil prices eked out modest gains in early Asian trade after falling nearly 2 percent on Thursday amid hopes for a Ukraine peace settlement and persistent global oversupply concerns.

In the Asian trading today, the Australian dollar rose to a 9-month high of 1.7136 against the euro and nearly a 3-year high of 0.9451 against the Canadian dollar, from yesterday's closing quotes of 1.7184 and 0.9431, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.66 against the euro and 0.95 against the loonie.

Against the U.S. dollar and the yen, the aussie advanced to nearly a 1-1/2-year high of 0.6854 and a 1-1/2-year high of 108.73 from Thursday's closing quotes of 0.6481 and 108.37, respectively. The aussie is likely to find resistance around 0.69 against the greenback and 110.00 against the yen.

The aussie edged up to 1.1597 against the NZ dollar, from yesterday's closing value of 1.1541. On the upside, 1.17 is seen as the next resistance level for the aussie.

Looking ahead, PMI reports from major European economies and U.K. for January are due to be released in the European session.

In the New York session, Canada retail sales data for November and manufacturing sales data for December, U.S. S&P Global Composite PMI for January, U.S. University of Michigan's consumer sentiment index for January, U.S. Consumer Board's leading index for October and U.S. Baker Hughes oil rig count data are slated for release.