Australia, NZ dollars in holding pattern for payrolls, RBA meeting

SYDNEY: The Australian and New Zealand dollars were in a holding pattern on Friday as markets awaited the latest reading on US jobs, while pondering the possibilities for next week’s policy meeting of Australia’s central bank.

A strong reading for March payrolls, and particularly for average weekly earnings, could lift the US dollar broadly, though the market already has a huge amount of tightening priced in for the Federal Reserve.

It is also wagering the Reserve Bank of Australia (RBA) will start hiking as soon as June given that unemployment has fallen to 4% well ahead of forecasts, and core inflation for the first quarter looks likely to spike above 3%. Futures are fully priced for a move to 0.25% in June followed by six more hikes to 1.75% by the year end.

The RBA has so far vowed to be “patient” on policy and any softening of that commitment next week would only spur speculation of an early rise.