AGL 38.48 Decreased By ▼ -0.08 (-0.21%)
AIRLINK 203.02 Decreased By ▼ -4.75 (-2.29%)
BOP 10.17 Increased By ▲ 0.11 (1.09%)
CNERGY 6.54 Decreased By ▼ -0.54 (-7.63%)
DCL 9.58 Decreased By ▼ -0.41 (-4.1%)
DFML 40.02 Decreased By ▼ -1.12 (-2.72%)
DGKC 98.08 Decreased By ▼ -5.38 (-5.2%)
FCCL 34.96 Decreased By ▼ -1.39 (-3.82%)
FFBL 86.43 Decreased By ▼ -5.16 (-5.63%)
FFL 13.90 Decreased By ▼ -0.70 (-4.79%)
HUBC 131.57 Decreased By ▼ -7.86 (-5.64%)
HUMNL 14.02 Decreased By ▼ -0.08 (-0.57%)
KEL 5.61 Decreased By ▼ -0.36 (-6.03%)
KOSM 7.27 Decreased By ▼ -0.59 (-7.51%)
MLCF 45.59 Decreased By ▼ -1.69 (-3.57%)
NBP 66.38 Decreased By ▼ -7.38 (-10.01%)
OGDC 220.76 Decreased By ▼ -1.90 (-0.85%)
PAEL 38.48 Increased By ▲ 0.37 (0.97%)
PIBTL 8.91 Decreased By ▼ -0.36 (-3.88%)
PPL 197.88 Decreased By ▼ -7.97 (-3.87%)
PRL 39.03 Decreased By ▼ -0.82 (-2.06%)
PTC 25.47 Decreased By ▼ -1.15 (-4.32%)
SEARL 103.05 Decreased By ▼ -7.19 (-6.52%)
TELE 9.02 Decreased By ▼ -0.21 (-2.28%)
TOMCL 36.41 Decreased By ▼ -1.80 (-4.71%)
TPLP 13.75 Decreased By ▼ -0.02 (-0.15%)
TREET 25.12 Decreased By ▼ -1.33 (-5.03%)
TRG 58.04 Decreased By ▼ -2.50 (-4.13%)
UNITY 33.67 Decreased By ▼ -0.47 (-1.38%)
WTL 1.71 Decreased By ▼ -0.17 (-9.04%)
BR100 11,890 Decreased By -408.8 (-3.32%)
BR30 37,357 Decreased By -1520.9 (-3.91%)
KSE100 111,070 Decreased By -3790.4 (-3.3%)
KSE30 34,909 Decreased By -1287 (-3.56%)
Markets

Australia, NZ dollars lean on support as US$ barges ahead

  • The euro was at A$1.5461, against $1.6000 at the start of the year.
Published April 1, 2021

SYDNEY: The Australian and New Zealand dollars were perilously close to major chart bulwarks on Thursday as the US dollar continued its broad advance, though both currencies fared better against the low-yielding euro and yen.

The Aussie eased to $0.7584, after failing to clear resistance at $0.7664.

The focus was on the recent low of $0.7564 where a break would risk a retreat to $0.7500, if not the 200-day moving average at $0.7385.

The kiwi faded to $0.6975 and away from resistance at $0.7033. Again, that was uncomfortably near a recent four-month trough of $0.6944 and a breach would open the way to the 200-day moving average at $0.6880.

Australian data was a mixed bag with retail sales falling a smaller-than-expected 0.8% in February, while the trade surplus missed forecasts at A$7.5 billion ($5.69 billion) because of a surprisingly sharp rise in imports.

Much more emphatic were figures showing home prices rose at the fastest pace in three decades in March, delivering a windfall to consumer wealth and confidence.

Yet the surge has done little to shake the Reserve Bank of Australia's (RBA) commitment to super-loose policy, which is focused on driving unemployment down to levels that will lift wage growth and inflation.

"With this in mind, we expect the RBA to remain dovish, despite rapidly rising housing prices and growth in new housing finance," said Paul Bloxham, Australia chief economist at HSBC.

"We expect the RBA to keep its cash rate and 3-year yield targets at 0.10% in 2021 and 2022, and to extend its QE programme beyond October."

While three-year yields are pinned near 0.1%, longer-term yields have been carried higher by the global reflation trade leaving the yield curve at its steepest in decades.

Yields on 10-year bonds were up at 1.819% on Thursday, a rise of 15 basis points for the week.

With yields in Japan and the EU held back by central bank action, the Aussie has gained on the yen and euro.

The euro was at A$1.5461, against $1.6000 at the start of the year.

"AUD's 10-year yield pickup on the euro has trended sharply higher since November 2020," said Westpac FX strategist Sean Callow.

"Once the global recovery becomes more synchronised in the second half of the year, AUD's leverage to industrial growth should underpin gains on crosses. Our base case is A$1.51 mid-year, A$1.49 year-end."

Comments

Comments are closed.