Commodity currencies such as the Australia, the New Zealand and the Canadian dollars strengthened against their major currencies in the Asian session on Wednesday, as Asian stock markets traded mostly in the green, following the broadly positive cues from the Wall Street overnight. Traders are also cautiously optimistic over the outlook for interest rates following recent economic data.

Strong gains among gold miners and technology stocks, also boosted the investor sentiment.

The markets were boosted after domestic data released showed the monthly Consumer Price Index (CPI) indicator dropped to a three-month low. This is also the first decline in annual inflation and the slowest pace since July.

In economic news, Australia's monthly Consumer Price Index (CPI) indicator rose 4.9 percent in the year to October 2023, slowing from a 5.6 percent gain in the year to September 2023 and was below the market consensus of 5.2 percent. It was the first decline in annual inflation since July. Inflation remained well above the Reserve Bank of Australia's target range of 2 to 3 percent.

Meanwhile, the Australian Bureau of Statistics said the value of total construction work done in Australia was up a seasonally adjusted 13 percent on quarter in the third quarter of 2023, coming in at A$64.768 billion. That beat forecasts for an increase of 0.3 percent and was up from 0.4 percent in the three months prior. On a yearly basis, the value of overall construction work was up 8.5 percent.

Crude oil prices rose sharply on hopes that OPEC will extend output cuts at Thursday's ministerial meeting. A weak dollar contributed as well to the jump in oil prices. West Texas Intermediate Crude oil futures for January ended up $1.55 or 2.1 percent at $76.41 a barrel.

The NZ dollar appreciated sharply after the announcement of Reserve Bank of New Zealand's Official Cash Rate steady, as expected.

The Reserve Bank of New Zealand announced that it is holding its Official Cash Rate steady at 5.50 percent, in line with expectations and unchanged.

In the accompanying statement, the RBNZ said that interest rates are restricting spending in the economy and consumer price inflation is declining, as is necessary to meet the Committee's Remit. However, inflation remains too high, and the Committee remains wary of ongoing inflationary pressures.

In the Asian trading now, the Australian dollar rose to nearly a 4-month high of 0.6677 against the U.S. dollar and more than a 3-week high of 1.6498 against the euro, from yesterday's closing quotes of 0.6648 and 1.6526, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.68 against the greenback and 1.63 against the euro.

Against the Canadian dollar, the aussie edged up to 0.9043 from yesterday's closing value of 0.9024. The aussie may test resistance near the 0.91 region.

The NZ dollar rose to nearly a 4-month high of 0.6209 against the U.S. dollar, from yesterday's closing value of 0.6136. The kiwi may test resistance near the 0.64 region.

The kiwi advanced to nearly a 2-week high of 91.22 against the yen, from a recent 6-day low of 90.23. On the upside, 92.00 is seen as the next resistance level for the kiwi.

Against the euro and the Australian dollar, the kiwi climbed to 1-1/2-month highs of 1.7742 and 1.0729 from yesterday's closing quotes of 1.7908 and 1.0833, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 1.74 against the euro and 1.06 against the aussie.

The Canadian dollar rose to a 2-month high of 1.3541 against the U.S. dollar, from yesterday's closing value of 1.3574. The next upside possible target for the loonie is seen around the 1.33 region.

Against the yen, the loonie edged up to 08.75 from a recent 1-week low of 108.27. If the loonie extends its uptrend, it is likely to find resistance around the 111.00 area.

The loonie advanced to 1.4899 against the euro, from yesterday's closing value of 1.4918. On the upside, 1.46 is seen as the next resistance level for the loonie.

Looking ahead, Germany's import price data for October is due to be released at 2:00 am ET in the pre-European session.

In the European session, the Bank of England is set to release mortgage approvals for October and the European Commission publishes euro area economic sentiment survey results for November.

At 3:00 am ET, the European Central Bank will hold its non-monetary policy meeting in Frankfurt.

In the New York session, U.S. MBA mortgage approvals data, Canada quarterly second estimate GDP growth rate, U.S. retail and wholesale inventories for October, good trade balance data for October, U.S. EIA crude oil data and U.S. Fed's Beige book report are slated for release.

At 8:00 am ET, Destatis is scheduled to issue Germany's flash consumer and harmonized prices for November. Consumer price inflation is expected to slow to 3.5 percent from 3.8 percent in October.

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