Australian Dollar Extends Gain

The Australian dollar extended its early rally against its key counterparts in early European deals on Wednesday, as the nation's consumer price inflation rose in line with consensus for the third quarter, reducing the likelihood of a rate cut from the Reserve Bank of Australia.

Data the Australian Bureau of Statistics showed that consumer prices rose 1.7 percent on year in the third quarter of 2019 - in line with expectations and up from 1.6 percent in the previous three months.

On a quarterly basis, inflation was up 0.5 percent - again matching expectations and down from 0.6 percent in the three months prior.

The Reserve Bank of Australia's trimmed mean came in at 0.4 percent on quarter and 1.6 percent on year - both unchanged and as expected.

Markets also braced for what seems almost assuredly to be a third rate cut in as many meetings of the Federal Reserve later today.

The Federal Open Market Committee announcement is scheduled for 2:00 p.m. ET, followed by a press conference with Powell at 2:30 p.m. ET.

The aussie strengthened to an 8-day high of 0.6874 against the greenback and a 1-1/2-month high of 1.0824 against the kiwi, from its early lows of 0.6849 and 1.0785, respectively. The currency is seen finding resistance around 0.71 against the greenback and 1.10 against the kiwi.

Reversing from an early low of 74.53 against the yen, the aussie advanced to 74.82. On the upside, 1.10 is possibly seen as its next resistance level.

The aussie held steady against the loonie, after rising as high as 0.8994 at 9:00 pm ET, which was its highest level since October 22. The pair had ended Tuesday's trading at 0.8983.

The aussie appreciated to 1.6168 against the euro in the previous session and held steady thereafter. At yesterday's close, the pair was worth 1.6187.

Looking ahead, Eurozone economic sentiment index for October is due in the European session.

At 8:15 am ET, U.S. ADP private payrolls data for October is scheduled for release.

The U.S. GDP data for the third quarter is due out in the New York session.

German flash inflation data for October will be published at 9:00 am ET.

At 10:00 am ET, the Bank of Canada announces its interest rate decision. Economists widely expect the central bank to maintain the benchmark rate at 1.75 percent.

At 2:00 pm ET, the Fed announces its decision on interest rates. Economists widely expect the Fed to cut federal funds rate to between 1.50 percent and 1.75 percent.

AUD vs NZD (FX:AUDNZD)
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