The Australian and New Zealand dollars stood near nine-month peaks on Thursday, though their explosive monthly gains were unlikely to be greeted with open arms by their respective central banks. The Australian dollar sat at $0.7658, having popped above 77 cents on Wednesday for the first time since June. It has leapt 7.1 percent so far this month and if sustained, it would be the largest such increase since late 2011.
Resistance was found at $0.7750. Yet, strength in the Aussie, up 8 cents since mid-January, could test the patience of the Reserve Bank of Australia (RBA). The central bank holds its policy review on April 5 and while it is widely expected to keep rates at a record low of 2 percent, some dealers see increasing risks of an easing.
The New Zealand dollar rose as high as $0.6965 overnight, a level unseen since June, before retracing to around $0.6900 in morning trade. "There has been no holding back the NZD/USD. Late last evening it gapped through technical resistance at $0.6900, subsequently trading between $0.6900 and $0.6950," said BNZ Senior Market Strategist Kymberly Martin in a research note. It was on track for an increase of 4.7 percent in March, its largest monthly gain since November.
Australian government bond futures rose, with the three-year bond contract up 2 ticks at 98.120. The 10-year contract added 1 tick to 97.5150, while the 20-year contract edged up 1.5 tick to 96.9450. Australia's two-year bonds pay 1.9 percent, while New Zealand's counterparts offer 2.0 percent. That compares with the negative yields of Germany, France, Sweden and more recently Japan.
Comments
Comments are closed.