AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)

The Australian and New Zealand dollars looked vulnerable on Monday as mounting tensions in the Middle East favoured safe-haven assets, while Australia's economy suffered with the drag from natural disasters at home.

The Aussie edged down to $0.6940, having already shed 0.6% on Friday when United States forces killed a top Iranian commander.

The move was again led by flows into and out of the safe-haven yen, with the Aussie slipping to a three-week low of 74.71. It lost 1.1% on Friday as the yen jumped across the board.

The kiwi dollar was pinned at $0.6657 and some way short of last week's five-month top of $0.6755. Chart support comes in around $0.6645.

With economies heavily reliant on free trade, the Antipodean currencies tend to be shorted as a hedge against global uncertainty.

In this case, the Aussie could draw some indirect support from steep gains in gold and oil prices, given the country is a major exporter of the metal and of liquefied natural gas, the price of which is tied to oil.

Investors were also happy to load up with Australia's top-rated bonds, driving 10-year yields down to 1.219% from a five-month high of 1.42% hit last week.

Three-year bond futures firmed 2 ticks to 99.205, implying an yield of 0.795%.

Bill futures added to their gains both due to the risks to growth globally and threats to the domestic economy from bushfires raging across New South Wales and Victoria.

The devastation is likely to hit consumer confidence hard at a time when households were already on a spending strike because of sluggish wage growth. The worst of the fires also coincided with the height of the Christmas shopping and tourist seasons and could well drag on economic growth in both December and January.

Investors have reacted by narrowing the odds on another rate cut from the Reserve Bank of Australia (RBA). A move in February is now put at a 46% probability, compared to less than 20% a couple of weeks ago.

A quarter-point easing to 0.5% is almost fully priced in by June.

Data out this week include approvals to build new homes on Wednesday, the trade balance on Thursday and retail sales for November on Friday.

The latter are actually expected to show a solid increase for November, but largely because sale events such as Black Friday pulled spending forward from Christmas.

Copyright Reuters, 2020

Comments

Comments are closed.