SYDNEY: The Australian and New Zealand dollars extended their winning streak on Wednesday as the global easing cycle gathered pace with the latest cut from Sweden and traders sold the greenback ahead of expected downward revisions to US jobs data.
The Aussie held at $0.6745, having climbed for four sessions to a one-month top of $0.6749 on Tuesday.
It is now up 6.4% from its low in August, with resistance at $0.6760 and $0.6798.
The kiwi dollar was enjoying the view at a six-week top of $0.6160, having gained 0.7% overnight.
It is up 5.4% since the low in August and broke a key resistance level of $0.6085, shaking off post-RBNZ gloom.
Strong results from a dairy auction on Wednesday that showed a 5.5% rise in global milk prices, a key New Zealand export, likely also helped.
Overnight, Sweden’s central bank cut rates and signalled a willingness to speed up easing if needed. Canadian inflation cooled to a 40-month low in July, laying the ground for its central bank to cut rates again.
Global bonds rallied, with lower yields undermining the US dollar.
Traders also sold the greenback on expectations for large downward revisions to the US jobs data reported this year that is due later in the day, which would be supportive for cuts to interest rates.
Australia, NZ dollars hover near 1-month highs as Fed cut hopes grow
Also later in the day, the Federal Reserve will release the minutes from its August meeting which will show how many members supported a rate cut.
“The DXY Index (dollar index) is within striking distance of returning this year’s gains,” said Philip Wee, a FX strategist at DBS Bank.
“The shift towards generalised USD weakness was also evident in the appreciation of the AUD and GBP amid more unwinding of yen carry positions.”
Indeed, with pretty much everything gaining on the dollar, the Australian dollar failed to claw back much ground on the Japanese yen, fetching just 97.95 yen, still quite some way from its peak of 109.67 in July.
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