The Australian dollar eased from 2-1/2 year peaks on Monday as speculators booked some profits on short US dollar positions while bracing for a key report on domestic inflation later in the week. The Aussie dollar was down 0.26 percent at $0.8091, having stretched as far as $0.8136 on Friday. That was its highest since May 2015 and cleared a double top from September at $0.8105 and $0.8125.
The local currency has been underpinned by broad weakness in its US counterpart, strength in global growth and commodity prices and a run of improving data domestically. Yet its ascent will also put downward pressure on import prices and inflation, a trend that is unlikely to be welcomed by the Reserve Bank of Australia (RBA). The New Zealand dollar had also been gaining ground on the its US cousin until last week's inflation surprise caused a sharp setback. The kiwi stood at $0.7332 on Monday, some way short of the recent four-month top of $0.7435.
A regional holiday in Auckland, the country's commercial centre, muted trading and the week ahead is light for domestic data. New Zealand government bonds eased, sending yields 2.5 basis points higher at the long end of the curve. Australian government bond futures dipped, with the three-year bond contract off 1.5 ticks at 97.720. The 10-year contract lost 2.5 ticks to 97.1400.
Consumer price figures for the December quarter, due on Wednesday, are expected to show underlying inflation remained stuck below the floor of the RBA's 2-3 percent target for two years straight. Indeed, analysts suspect risks are for a softer result given Q4 CPI data from New Zealand showed price pressures in tradable goods and services were surprisingly weak.
Comments
Comments are closed.