2023.06.3007:03:00UTC+00Antipodean Currencies Rise Amid Risk Appetite

Antipodean currencies such as the Australia and the New Zealand dollars strengthened against their major rivals in the Asian session on Friday amid risk appetite, as traders react to the results of the U.S. Fed's annual bank stress test that showed large banks are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession.

"All 23 banks tested remained above their minimum capital requirements during the hypothetical recession, despite total projected losses of $541 billion," the Fed said.

Meanwhile, traders were also reacting to another batch of largely upbeat U.S. economic data, which further eased recession worries but also renewed concerns about the outlook for interest rates.

Crude oil prices climbed higher, continuing to benefit from yesterday's report showing a huge decline in crude oil stockpiles in the week ended June 23. Concerns about rising interest rates and economic slowdown limited the uptick in oil prices. West Texas Intermediate Crude oil futures for August ended higher by $0.30 or about 0.4% at $69.86 a barrel.

Meanwhile, traders also remain cautious amid the heightened economic uncertainties in China, Australia's largest trading partner.

In the Asian trading today, the Australian dollar rose to 2-day highs of 96.08 against the yen and 1.6382 against the euro from yesterday's closing quotes of 95.76 and 1.6416, respectively. If the aussie extends its uptrend, it is likely to find resistance around 99.00 against the yen and 1.57 against the euro.

Against the U.S. and the Canadian dollars, the aussie advanced to 0.6636 and 0.8789 from Thursday's closing quotes of 0.6616 and 0.8764, respectively. The aussie may test resistance around 0.68 against the greenback and 0.89 against the loonie.

The NZ dollar rose to 2-day highs of 88.26 against the yen and 1.7822 against the euro, from yesterday's closing quotes of 87.89 and 1.7885, respectively. If the kiwi extends its uptrend, it may find resistance around 90.00 against the yen and 1.71 against the euro.

Against the U.S. and the Australian dollars, the kiwi advanced to 0.6100 and 1.0878 from Thursday's closing quotes of 0.6069 and 1.0892, respectively. On the upside, 0.63 against the greenback and 1.06 against the aussie are seen as the next resistance level for the kiwi.

Meanwhile, the safe-haven yen weakened against its major rivals as Asian shared traded higher.

The yen declined to a record low of 161.32 against the Swiss franc, from yesterday's closing value of 160.84. The yen may test support around the 162.00 area.

Against the U.S. and the Canadian dollars, the yen dropped to nearly an 8-month low of 145.07 and a 3-day low of 109.41 from Thursday's closing quotes of 144.73 and 109.18, respectively. If the yen extends its downtrend, it is likely to find support around 147.00 against the greenback and 112.00 against the loonie.

The yen slipped to a 2-day low of 182.96 against the pound, from yesterday's closing value of 182.49. The next possible downside target level for the yen is seen around the 188.00 region.

Against the euro, the yen edged down to 157.58 from Thursday's closing value of 157.19. The yen is likely to find support around the 160.00 region.

Looking ahead, Swiss retail sales data for May is due at 2:30 am ET in the pre-European session.

In the European session, Swiss KOF leading indicators for June, German unemployment data for June, Eurozone flash inflation for June and unemployment data for May are slated for release.

In the New York session, Canada flash GDP data for May, U.S. PCE price index for May, U.S. personal income and spending data for May, U.S. Chicago PMI for May, U.S. University of Michigan final consumer sentiment data for June and U.S. Baker hughes oil rig count data are set to be published.