SYDNEY: The Australian dollar dipped against a strong greenback on Monday, while the Kiwi dollar fell slightly after a COVID-19 lockdown was extended in its largest city Auckland.
The Aussie edged down 0.7% to $0.7347, having found support around $0.7345. That was 1.7% away from its September high of $0.7455 but far from the recent 10-month trough of $0.7107.
The kiwi dollar was off 0.22% at $0.7109 but still at the top end of its three-month range, with a recent three-month top of $0.7170. The currency has support around $0.7083.
Investors were cautious ahead of a Reserve Bank of Australia speech and jobs data on Tuesday, as well as economic growth numbers for the second quarter in New Zealand on Thursday, analysts said.
New Zealand’s Prime Minister Jacinda Ardern said Monday that Auckland would remain in lockdown until midnight on Sept. 21 to beat the spread of the Delta variant of the coronavirus.
JPMorgan economists expect strong growth of 1.7% for the June quarter, driven by household consumption. The Reserve Bank of New Zealand will have to balance the outcome against lower business and consumer confidence since August due to the lockdowns when deciding whether to hike rates in October.
Data from Statistics New Zealand showed food prices rose 0.3 percent in August, the lowest level since March.
“There had been some discussion around a possible 50 basis points hike (but) today’s food price numbers will cool the 50 bps-hike crowd,” said Steven Dooley, a currency strategist at Western Union Business Solutions.
“The NZD is still likely to outperform,” he added.
A strong US dollar was also weighing on the antipodean currencies, traders said.
Bond prices were lower, pushing New Zealand bond yields about 2 basis points higher across the curve.
Across the Tasman sea, yields on Australia’s 10-year paper were also two basis points higher at 1.260%, while 3-year yields fell two basis points to 0.255%.