Forex - Aussie gains in early Asia with all eyes on ECB ahead

Written By Unknown on Kamis, 22 Januari 2015 | 08.10

Investing.com - Investing.com - The Australian dollar gained in Asia early Thursday as investors looked ahead to a key European Central Bank meeting.

AAUD/USD traded at 0.8098, up 0.15%, while USD/JPY traded at 117.83, down 0.11%. EUR/USD changed hands at 1.1616, up 0.04%.

In Australia, MI inflation expectations are due at 0030 GMT for January, with a sharp fall expected from last month's 3.4%, while HIA new homes sales for November are also due with the previous a gain of 3.0%.

Overnight, the dollar trimmed losses against the other major currencies on Wednesday, inching its way back toward recent 12-year highs as investors turned their attention to the European Central Bank's upcoming policy meeting on Thursday.

Earlier Wednesday, the U.S. Commerce Department said that the number of building permits issued last month decreased by 1.9% to 1.032 million units from November's total of 1.052 million.

Analysts expected building permits to rise by 1.3% to 1.055 million units in December.

The report also showed that U.S. housing starts rose by 4.4% last month to hit 1.089 million units from November's total of 1.043 million units, compared to expectations for a reading of 1.040 million.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, traded down 0.01% at 93.00.

Sentiment on the single currency remained vulnerable as investors waited to see if the European Central Bank would embark on an outright quantitative easing program on Thursday.

On Wednesday, the Bank of Japan maintained the size of its stimulus program and reiterated its pledge to increase base money at an annual pace of ¥80 trillion through buying government bonds and risk assets.

The central bank also cut its core inflation forecast 1% from 1.7% three months ago.

The loonie weakened broadly after the Bank of Canada unexpectedly lowered its overnight target rate to 0.75% from 1.0% previously, saying that the rout in oil prices over the past six months would be negative for growth and underlying inflation in Canada.

The BoC said it now expects economic growth to slow to about 1.5% and the output gap to widen in the first half of 2015. Inflation is also expected to fall below the bank's target during the coming year, before moving higher again in 2016.

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