SYDNEY: The Australian and New Zealand dollars dipped against the greenback on Monday, struggling to break above recent resistance ahead of a week full of central bank meetings that is expected to signal shifts away from massive monetary stimulus.

The Aussie was 0.1% lower at $0.7166, unable to break its resistance at $0.7187, below which the currency has traded since Nov. 26. Immediate support lies around $0.713.

The kiwi was also lagging at $0.6792 at 0341 GMT, after opening at its recent resistance of $0.6812 and still near its recent low of $0.6737 on Dec. 7.

Investors are bracing for the last Federal Reserve meeting of the year, hungry to learn how quickly the central bank plans to finish unwinding its bond-buying programme and when it may start to raise rates.

Among the 17 central bank meetings this week are the European Central Bank, the Bank of England and the Bank of Japan, which are also heading toward normalising policy, albeit at a slower pace.

In Australia, the central bank last week painted a rosier economic outlook in its last monetary policy meeting of the year.

“Short-term, volatility is likely to persist, given nerves over both Omicron and the FOMC,” Westpac’s currency strategist Sean Callow said.

“A slightly more confident RBA in December keeps markets betting on higher rates in Australia. Looking into Q1 2022 ... the Aussie should be able to break even around 0.71.”

Traders this week will likely scrutinise Australian labour data due on Thursday, after October figures showed payrolls hitting levels from before June’s Delta outbreak lockdowns.

“An upside surprise on the labour market will likely see more calls for the RBA to end QE in February,” Citigroup’s economist Josh Williamson said.

The outlook, including lingering concerns around the latest COVID-19 outbreaks, has seen safe-haven bonds hold some gains so far this month, with 10-year yields trading at 1.62% compared with a low of 1.73% on Nov. 30. They were two basis points lower on Monday.

New Zealand bonds were also slightly higher on Monday, pushing yields three and a half basis points lower across the curve.

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