AGL 37.98 Decreased By ▼ -0.04 (-0.11%)
AIRLINK 205.50 Increased By ▲ 8.14 (4.12%)
BOP 9.57 Increased By ▲ 0.03 (0.31%)
CNERGY 6.35 Increased By ▲ 0.44 (7.45%)
DCL 9.05 Increased By ▲ 0.23 (2.61%)
DFML 37.69 Increased By ▲ 1.95 (5.46%)
DGKC 98.30 Increased By ▲ 1.44 (1.49%)
FCCL 35.90 Increased By ▲ 0.65 (1.84%)
FFBL 88.94 Increased By ▲ 6.64 (8.07%)
FFL 13.75 Increased By ▲ 0.58 (4.4%)
HUBC 129.42 Increased By ▲ 1.87 (1.47%)
HUMNL 13.70 Increased By ▲ 0.20 (1.48%)
KEL 5.46 Increased By ▲ 0.14 (2.63%)
KOSM 7.25 Increased By ▲ 0.25 (3.57%)
MLCF 45.28 Increased By ▲ 0.58 (1.3%)
NBP 60.80 Decreased By ▼ -0.62 (-1.01%)
OGDC 219.20 Increased By ▲ 4.53 (2.11%)
PAEL 40.78 Increased By ▲ 1.99 (5.13%)
PIBTL 8.49 Increased By ▲ 0.24 (2.91%)
PPL 198.98 Increased By ▲ 5.90 (3.06%)
PRL 39.50 Increased By ▲ 0.84 (2.17%)
PTC 27.27 Increased By ▲ 1.47 (5.7%)
SEARL 107.10 Increased By ▲ 3.50 (3.38%)
TELE 8.58 Increased By ▲ 0.28 (3.37%)
TOMCL 35.85 Increased By ▲ 0.85 (2.43%)
TPLP 13.74 Increased By ▲ 0.44 (3.31%)
TREET 24.38 Increased By ▲ 2.22 (10.02%)
TRG 61.15 Increased By ▲ 5.56 (10%)
UNITY 33.25 Increased By ▲ 0.28 (0.85%)
WTL 1.68 Increased By ▲ 0.08 (5%)
BR100 12,005 Increased By 278.4 (2.37%)
BR30 37,240 Increased By 863.2 (2.37%)
KSE100 112,454 Increased By 2940.9 (2.69%)
KSE30 35,494 Increased By 980.4 (2.84%)

The Australian dollar rallied on Tuesday after the country's central bank held interest rates steady and stayed upbeat on the economic outlook despite the impact of bushfires at home and the coronavirus in China.

The Aussie climbed 0.45% to $0.6720 and away from a four-month low of $0.6679, a modest bounce following almost three weeks of relentless selling.

It also just avoided a bearish break of October's trough of $0.6670, which would have taken it to territory last seen in early 2009.

The New Zealand dollar caught a slight lift to $0.6468 , up from a two-month trough of $0.6451.

The short-covering squeeze came when the Reserve Bank of Australia (RBA) kept its cash rate at a record low of 0.75% following the first policy meeting of the year.

Markets had priced in around a one-in-five chance of a cut given the economic damage done by a summer of raging wildfires and spreading epidemic in China.

RBA Governor Philip Lowe acknowledged both the challenges in a post-meeting statement, but argued they would only "temporarily weigh" on domestic growth.

Instead, he stuck with a forecast of 2.75% growth this year and 3% next, above most private forecasters. He did reiterate that the RBA stood ready to ease again if needed, following three cuts last year, but put no time frame on it.

Markets had aggressively ramped up wagers on further cuts as the economic fallout from the coronavirus spread. Futures still imply a 73% chance of a quarter-point move by April, rising to 100% by May.

Investors have also shifted sharply to price in the risk of yet a further easing, with a rate of 0.25% indicated at a 60% probability by November.

Yields on three-year government debt hit an all-time low of 0.553%, well under the overnight rate. Yields on 10-year notes have shed 48 basis points just this year to reach 0.890%. Bond futures eased modestly in the wake of the RBA decision, with the three-year bond contract off 4 ticks at 99.380. The 10-year contract dipped 1.5 ticks to 99.0500.

Copyright Reuters, 2020

Comments

Comments are closed.