Australia, NZ dollars near multi-week peaks as greenback creaks
- The break of $0.7088 resistance was bullish for a push to $0.7200 and the May peak of $0.7277
SYDNEY: The Australian and New Zealand dollars were perched near multi-week highs on Tuesday as the greenback eased broadly despite a spike in Treasury yields, rekindling talk of diversification from the US currency.
The Aussie was up at $0.7111, after rising 0.3% overnight to reach a 10-week top at $0.7129.
The break of $0.7088 resistance was bullish for a push to $0.7200 and the May peak of $0.7277.
It also drew demand against the yen, climbing to 113.27 and extending the recovery from a 109.19 low hit after Japan and the United States intervened in late July.
The kiwi dollar stood at $0.5904, after also touching a 10-week high at $0.5926 overnight.
The next barrier is a double top around $0.5993, with support at $0.5821 and $0.5762.
Tim Baker, a macro strategist at Deutsche Bank, noted some recent pieces of US economic data had missed forecasts, while the news had improved in other developed nations.
“It’s denting the US growth exceptionalism picture,” Baker said in a note.
“It’s not to say the US is in a bad place at all, just to remind that the dollar tends to lag when growth is looking solid elsewhere in the world.”
A survey out Tuesday showed sentiment among Australian consumers improved markedly this month after the Reserve Bank of Australia held interest rates at 4.35%, following three hikes earlier in the year.
Data on jobs is due on Thursday and forecast to show a gain of 15,000 in July, on top of June’s bumper 76,300 increase.
The unemployment rate is seen holding at 4.4%, barely changed from where it was a year earlier.
A selloff in Treasuries did push Australian 10-year yields up to 5.047%, a rise of 6 basis points in two sessions, leaving the spread over US debt little changed at 32 basis points.
The Australian government is selling a new 2038 bond on Tuesday that is expected to draw strong investor demand.
Tech giant Alphabet is also looking to sell paper in its first Australian deal, which could be the largest corporate issue ever for the country.
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