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Australian, NZ Dollars Advance On PBoC’s Assurance

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The Australian and NZ dollars climbed against their major counterparts in the late Asian session on Tuesday, as risk sentiment improved after China’s central bank promised to increase support for the real economy as a virus crisis stoked growth concerns.

“The PBOC will step up the prudent monetary policy’s support to the real economy, especially for industries and small businesses hit hard by the pandemic,” according to a statement published by the bank.

On Monday, the central bank reduced the reserve requirement ratio by 100 basis points to 8 percent in a bid to support liquidity.

China’s economic outlook is clouded by a renewed rise in Covid-19 cases and lockdowns to contain the outbreak.

In Beijing, authorities decided to expand its Covid-19 mass testing from one district to another 10 districts.

The aussie edged up to 0.7229 against the greenback, 92.59 against the yen and 0.9185 against the loonie, off its early lows of 0.7169, 91.44 and 0.9133, respectively. The aussie is poised to face resistance around 0.74 against the greenback, 94.00 against the yen and 0.93 against the loonie.

The aussie was up against the euro, at a 4-day high of 1.4843. On the upside, 1.45 is likely seen as its next resistance level.

The kiwi rose to 4-day highs of 0.6645 against the greenback and 1.6112 against the euro, following its prior lows of 0.6609 and 1.6210, respectively. The currency may possibly challenge resistance around 0.685 against the greenback and 1.58 against the euro.

The kiwi gained to 85.14 against the yen, from an early low of 84.27. If the kiwi rises further, 87.00 is likely seen as its next resistance level.

The kiwi recovered to 1.0840 against the aussie, reversing from an early low of 1.0883. The next possible resistance for the kiwi is seen around the 1.06 level.

Looking ahead, Canada manufacturing sales for March, U.S. consumer confidence index for April, FHFA’s house price index and S&P/Case-Shiller home price index for February, durable goods orders and new home sales for March will be out in the New York session.

Euro Weakness Continues

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