ANL 35.65 Increased By ▲ 1.33 (3.88%)
ASC 14.80 Decreased By ▼ -0.05 (-0.34%)
ASL 24.85 Increased By ▲ 0.35 (1.43%)
AVN 91.25 Increased By ▲ 1.01 (1.12%)
BOP 7.79 No Change ▼ 0.00 (0%)
BYCO 10.15 Increased By ▲ 0.10 (1%)
DGKC 124.25 Increased By ▲ 0.05 (0.04%)
EPCL 56.50 Increased By ▲ 0.20 (0.36%)
FCCL 24.16 Decreased By ▼ -0.15 (-0.62%)
FFBL 28.80 Increased By ▲ 1.20 (4.35%)
FFL 16.10 Increased By ▲ 0.05 (0.31%)
HASCOL 9.72 Decreased By ▼ -0.02 (-0.21%)
HUBC 79.25 Decreased By ▼ -0.75 (-0.94%)
HUMNL 6.63 Increased By ▲ 0.19 (2.95%)
JSCL 20.70 Increased By ▲ 0.20 (0.98%)
KAPCO 40.25 Increased By ▲ 0.04 (0.1%)
KEL 3.81 Decreased By ▼ -0.04 (-1.04%)
LOTCHEM 16.20 Decreased By ▼ -0.05 (-0.31%)
MLCF 46.49 Decreased By ▼ -0.11 (-0.24%)
PAEL 35.24 Increased By ▲ 0.14 (0.4%)
PIBTL 10.35 Increased By ▲ 0.02 (0.19%)
POWER 9.17 Decreased By ▼ -0.08 (-0.86%)
PPL 85.35 Decreased By ▼ -0.15 (-0.18%)
PRL 25.00 Decreased By ▼ -0.01 (-0.04%)
PTC 9.72 Increased By ▲ 0.17 (1.78%)
SILK 1.24 No Change ▼ 0.00 (0%)
SNGP 40.50 Increased By ▲ 1.68 (4.33%)
TRG 162.90 Decreased By ▼ -4.50 (-2.69%)
UNITY 31.05 Increased By ▲ 0.40 (1.31%)
WTL 1.42 Decreased By ▼ -0.11 (-7.19%)
BR100 4,836 Increased By ▲ 15.71 (0.33%)
BR30 25,635 Decreased By ▼ -33.99 (-0.13%)
KSE100 45,049 Increased By ▲ 70.52 (0.16%)
KSE30 18,436 Decreased By ▼ -6.45 (-0.03%)

Coronavirus
VERY HIGH
Pakistan Deaths
15,619
11824hr
Pakistan Cases
729,920
431824hr
Sindh
269,474
Punjab
252,974
Balochistan
20,397
Islamabad
66,983
KPK
100,275
Markets

Australia, NZ dollars set to extend winning streak to 7th week

  • The Aussie stood at $0.7616 having climbed 1.1% for the week to touch $0.7639. That was the highest since June 2018 when it topped at $0.7677, the next major chart target.
18 Dec 2020

SYDNEY: The Australian and New Zealand dollars were heading for their seventh straight week of gains on Friday, given added impetus by surging commodity prices globally and higher bond yields at home.

The Aussie stood at $0.7616 having climbed 1.1% for the week to touch $0.7639. That was the highest since June 2018 when it topped at $0.7677, the next major chart target.

The kiwi rested at $0.7138, after reaching $0.7170 to be up 0.9% on the week. A breach of resistance at $0.7150 opened the door to $0.7395, a peak from April 2018.

Both currencies have been buoyed by the outperformance of their domestic economies, where the coronavirus has been mostly contained, and the broad strength of global commodity prices.

Iron ore, in particular, has been on a stellar run amid robust Chinese demand and concerns about supply, and the ore is Australia's single largest export earner. "When we look at it through the lens of commodity prices and Australia's Terms of Trade it is not difficult to conclude that significantly higher levels are readily justified," said analysts at NAB in a note.

At the same time, Australian bond yields had risen faster than those in the United States such that the spread between five-year yields had swung to zero now, from as much as -18 basis points in November.

The five-year yield was last at 0.38%, having touched a three-month high of 0.42% overnight.

As a result, NAB now saw the Aussie reaching $0.8000 by mid 2021, instead of early 2022, and to top out at $0.8300.

New Zealand yields have also been on the rise as the economy recovers swiftly from its COVID lockdown, with GDP rebounding 14% in the third quarter.

A survey out Friday showed business sentiment jumped to multi-year highs in December, turning positive for the first time since August 2017.

"The economy is showing impressive resilience," said Sharon Zollner, chief NZ economist at ANZ, noting output was back where it was before the pandemic struck.

The survey also found a pick up in price pressures, particularly in the red-hot construction and housing sectors, in part due to international supply disruptions.

"It's the kind of inflation central banks 'look through' as far as possible, but it's inflation nonetheless, and if it impacts inflation expectations and pricing intentions persistently, the Reserve Bank will have to take note," said Zollner.