The Australian dollar climbed to a three-week high on Thursday, making its fourth straight day of gains with help from a surge in oil prices after the Organisation of the Petroleum Exporting Countries agreed to trim output. That gave the Australia dollar a boost as the country is a major exporter of natural resources, though it is a net importer of oil.
The Aussie ran past key chart resistance at 77 US cents to hit its highest since September 8 but soon settled back to $0.7694, standing virtually unchanged from the last close. The Aussie has breached 77 cents several times in the past couple of months, but failed to hold above it. It has added about 1 percent this week and is set to end the month higher, although traders expect limited future gains.
The Reserve Bank of New Zealand has signalled rates will likely be cut again, possibly in November. The Aussie climbed to a 1-1/2 month high of NZ$1.0581 against the New Zealand dollar, after two straight day of gains. The New Zealand dollar climbed to $0.7272, and off a low of $0.7234, in line with other commodity-related currencies. New Zealand government bonds slipped, sending yields 2 basis points higher.
Australian government bond futures were mixed, with the three-year bond contract unchanged at 98.48. The 10-year contract fell 2 ticks to 98.025. "We expect further upside is capped until either commodity markets break significantly higher or the Reserve Bank of Australia signals that the next move for rates is higher," ANZ said in a note to clients. "We think the RBA is still a long way from switching to a tightening bias." Governor Philip Lowe gave an upbeat assessment on the economy earlier this month, but left the door slightly ajar for more cuts. The central bank is expected to keep its policy rate at 1.5 percent at a policy meeting next week.
Comments
Comments are closed.