SYDNEY/WELLINGTON: The Australian dollar traded slightly lower against its US counterpart on Tuesday while the New Zealand dollar was marginally higher, as traders weighed news about progress in the development of a coronavirus vaccine.
The Aussie was trading 0.03% lower at $0.7277 on Tuesday Sydney time, having hit its highest level in two months in late intraday trading on Monday at $0.7340 after Pfizer Inc said its experimental vaccine was more than 90% effective in preventing Covid-19. The New Zealand dollar was 0.18% higher to $0.6830 on Tuesday, which was also lower than the intraday high of $0.6854 on Monday when traders reacted to Joe Biden's clinching of the US presidency over the weekend and the vaccine news.
Australian yields had been falling after the RBA's bond-buying announcement, but bonds were now tracking the direction of US rates, which were sold off following Pfizer's findings. On Tuesday, ten-year Australian bond yields were 13 basis points higher at 0.91%, while three-year bonds were half a tick higher at 0.11%. The mirroring dynamic was likely to continue while the trajectory of yields in the near term was uncertain, analysts said.-Reuters
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