You are here

Aussie lifted as RBA stands pat, NZ dollar dragged higher

Tuesday, May 2, 2017 - 13:55

Australian dollar.jpg
The Australian dollar drifted higher on Tuesday after the central bank kept rates unchanged at a policy meeting and sounded a touch more optimistic about global growth, underlining the outlook for steady policy.

[SYDNEY] The Australian dollar drifted higher on Tuesday after the central bank kept rates unchanged at a policy meeting and sounded a touch more optimistic about global growth, underlining the outlook for steady policy.

The Australian dollar rose to US$0.7550, from US$0.7527 in early trade, away from a trough of US$0.7452 touched on Monday.

Resistance was seen around US$0.7566 and support at US$0.7473.

The Reserve Bank of Australia (RBA) kept rates at a record low of 1.5 per cent following two easings last year. All 71 economists in a Reuters poll expected a steady outcome this week.

sentifi.com

Market voices on:

"The RBA reaffirmed its neutral stance and was more constructive in terms of the global economy," said Elias Haddad, a senior strategist at Commonwealth Bank of Australia.

Yet, he added that the RBA's reference to low wage growth was likely to limit any significant upside for the Aussie.

Interbank futures show almost no chance of an easing this year, while a majority of 58 economists forecast an interest rate hike by June 2018.

Helping the Aussie was broad yen weakness which sent the Aussie to a one-month high of 84.26. It was last at 84.36, having gained more than a yen since Monday.

Likewise, the New Zealand dollar rose 0.2 per cent on the yen to 77.38, away from a trough of 76.09 touched last week.

That also supported the New Zealand dollar against its US counterpart.

"Of note is some recovery in the NZD. It seems a long time since we've been able to say that after a period of relentless selling pressure," said Jason Wong, currency strategist at BNZ, adding that the Kiwi had managed not to break below the key technical support level of US$0.6850.

The kiwi ground up to US$0.6925 from a near-eleven-month low of US$0.6852 the previous day and a solid week of daily losses.

New Zealand government bonds eased, sending yields three basis points higher at the long end of the curve.

Australian government bond futures eased, with the three-year bond contract off three ticks at 98.130. The 10-year contract dropped 3.5 ticks to 97.3600, while the 20-year contract lost 3.5 ticks to 96.7750.

REUTERS

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom