AGL 5.60 Decreased By ▼ -0.18 (-3.11%)
ANL 8.90 Increased By ▲ 0.02 (0.23%)
AVN 76.85 Decreased By ▼ -2.07 (-2.62%)
BOP 5.26 Decreased By ▼ -0.02 (-0.38%)
CNERGY 4.63 Decreased By ▼ -0.07 (-1.49%)
EFERT 81.27 Decreased By ▼ -0.33 (-0.4%)
EPCL 50.08 Decreased By ▼ -0.83 (-1.63%)
FCCL 13.16 Decreased By ▼ -0.22 (-1.64%)
FFL 5.69 Decreased By ▼ -0.03 (-0.52%)
FLYNG 7.07 Decreased By ▼ -0.08 (-1.12%)
FNEL 4.79 Decreased By ▼ -0.03 (-0.62%)
GGGL 8.80 Decreased By ▼ -0.10 (-1.12%)
GGL 14.55 Decreased By ▼ -1.33 (-8.38%)
HUMNL 5.69 Decreased By ▼ -0.08 (-1.39%)
KEL 2.63 Decreased By ▼ -0.03 (-1.13%)
LOTCHEM 28.60 Decreased By ▼ -0.45 (-1.55%)
MLCF 24.49 Decreased By ▼ -0.61 (-2.43%)
OGDC 72.43 Decreased By ▼ -0.02 (-0.03%)
PAEL 15.36 Increased By ▲ 0.01 (0.07%)
PIBTL 5.00 Decreased By ▼ -0.05 (-0.99%)
PRL 16.10 Decreased By ▼ -0.19 (-1.17%)
SILK 1.08 Decreased By ▼ -0.01 (-0.92%)
TELE 9.14 Decreased By ▼ -0.23 (-2.45%)
TPL 7.23 Decreased By ▼ -0.10 (-1.36%)
TPLP 18.61 Decreased By ▼ -0.34 (-1.79%)
TREET 21.68 Decreased By ▼ -0.32 (-1.45%)
TRG 136.71 Decreased By ▼ -4.44 (-3.15%)
UNITY 16.88 Decreased By ▼ -0.14 (-0.82%)
WAVES 9.86 Decreased By ▼ -0.04 (-0.4%)
WTL 1.41 No Change ▼ 0.00 (0%)
BR100 4,225 Decreased By -29.6 (-0.7%)
BR30 15,518 Decreased By -214.7 (-1.36%)
KSE100 42,150 Decreased By -243.4 (-0.57%)
KSE30 15,588 Decreased By -75.7 (-0.48%)
Markets

Australian dollar tries to break losing streak, struggles to escape lockdowns

  • Total credit outstanding surged 0.9% in June led by a 1.6% jump in business loans, itself the largest increase since 2007
Published July 30, 2021
Follow us

SYDNEY: The Australian dollar was trying to break a four-week losing streak on Friday as US economic data fell short of the market's high expectations and forced a round of speculative short covering.

The Aussie inched up to $0.7384 and away from its July trough of $0.7290, giving a gain of almost 0.5% for the week. The technical background remains fragile, however, and the currency needs to clear resistance at $0.7415 and $0.7487 to find safer footing.

The New Zealand dollar was ahead by 0.3% for the week at $0.6996, and well above its July low of $0.6882. It faces stiff resistance at $0.7015 and $0.7050.

Australian dollar upset by market tumult, RBA tries to staunch bond bleeding

Both benefited when figures showed the US economy grew strongly last quarter but not as strongly as investors had wagered on, taking some heat out of the dollar's recent rally.

Domestic data was also upbeat as Australian lending outstripped all expectations with the biggest monthly increase since January 2008.

Total credit outstanding surged 0.9% in June led by a 1.6% jump in business loans, itself the largest increase since 2007.

In New Zealand, approvals to build new homes climbed 3.8% in June to a fresh record high, underlining the ongoing construction boom as robust demand pushes prices ever higher.

Unfortunately for the Aussie, the local economy's remarkable recovery has now come unstuck as Sydney faces an extended coronavirus lockdown that is almost certain to cause a sharp contraction this quarter.

This has fuelled speculation the Reserve Bank of Australia (RBA) will sound very dovish at its August policy meeting next week and even delay plans to taper bond buying.

"Markets have firmly swung behind the RBA scrapping the planned September taper, keeping the weekly QE pace at A$5 billion in response to the indefinite and tighter Sydney lockdown," said Westpac FX analyst Sean Callow.

He noted the talk had already helped drive Australian 10-year bond yields down a steep 33 basis points this month to 1.18%. That put them 6 basis points below US Treasury yields, after starting the month 4 basis points above.

"As a result, we prefer selling Aussie in the low $0.74s and buying in the high $0.72s," said Callow.

Comments

Comments are closed.

Australian dollar tries to break losing streak, struggles to escape lockdowns

Imran Khan seeks power even if it undermines country's foundations: PM Shehbaz

Pakistan 'verifying reports' over IS-K claiming attack on Kabul embassy

CM Punjab Parvez Elahi says 'Gen Bajwa showed us way towards PTI'

Fawad says PTI ‘preparing for elections’ as Imran withdraws offer for talks

Tweets case: Quetta court approves Azam Swati’s five-day physical remand

Russia will not export oil subject to Western price cap, says deputy PM

PTI in front seat in second phase of AJK local govt polls

Air pollution hurts Bangladesh GDP as well as health: World Bank

India plans federal oversight of all real-money online games

PM Shehbaz felicitates people of Sindh on culture day celebrations