Daily Morning Report 12.07.2016

The Australian and New Zealand dollars climbed against their U.S. counterpart on Tuesday, after upbeat business confidence data from Australia and as higher oil prices lent support to the commodity currencies.

AUD/USD advanced 0.70% to 0.7587, the highest since June 24.

The National Australia Bank said its business confidence index rose to 6 in June from a reading of 3 the previous month.

Commodity currencies were also boosted as oil prices regained some ground on Tuesday amid supply disruptions in Iraq.

NZD/USD climbed 0.68% to trade at 0.7269, not far from Friday’s 14-month high of 0.7310.

Meanwhile, the greenback weakened mildly as investors digested last week’s strong U.S. employment data and began to focus on upcoming central bank meetings.

Investors are expecting a rate cut from the Bank of England at the conclusion of its policy meeting on Thursday, while Japanese Prime Minister Shinzo Abe’s victory in parliamentary elections on Sunday boosted speculation over upcoming stimulus measures by the Bank of Japan.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.18% at 96.41, just off the previous session’s two-week high of 96.81.