AVN 68.50 Increased By ▲ 0.75 (1.11%)
BAFL 31.10 Increased By ▲ 0.12 (0.39%)
BOP 4.88 Increased By ▲ 0.07 (1.46%)
CNERGY 3.93 Increased By ▲ 0.17 (4.52%)
DFML 14.10 Increased By ▲ 0.12 (0.86%)
DGKC 42.64 Increased By ▲ 1.64 (4%)
EPCL 47.50 Increased By ▲ 0.45 (0.96%)
FCCL 12.08 Increased By ▲ 0.43 (3.69%)
FFL 5.22 Increased By ▲ 0.06 (1.16%)
FLYNG 6.27 Increased By ▲ 0.33 (5.56%)
GGL 11.23 Decreased By ▼ -0.06 (-0.53%)
HUBC 67.50 Decreased By ▼ -0.45 (-0.66%)
HUMNL 5.78 Increased By ▲ 0.08 (1.4%)
KAPCO 28.07 Increased By ▲ 0.03 (0.11%)
KEL 2.33 Increased By ▲ 0.06 (2.64%)
LOTCHEM 26.75 Increased By ▲ 0.55 (2.1%)
MLCF 22.78 Increased By ▲ 1.12 (5.17%)
NETSOL 87.59 Increased By ▲ 1.14 (1.32%)
OGDC 100.85 Increased By ▲ 0.36 (0.36%)
PAEL 11.42 Increased By ▲ 0.27 (2.42%)
PIBTL 4.24 No Change ▼ 0.00 (0%)
PPL 81.10 Increased By ▲ 0.50 (0.62%)
PRL 13.58 Increased By ▲ 0.35 (2.65%)
SILK 0.92 Increased By ▲ 0.01 (1.1%)
SNGP 44.60 Increased By ▲ 0.70 (1.59%)
TELE 6.22 Increased By ▲ 0.15 (2.47%)
TPLP 16.25 Increased By ▲ 0.40 (2.52%)
TRG 123.25 Increased By ▲ 1.67 (1.37%)
UNITY 14.16 Increased By ▲ 0.16 (1.14%)
WTL 1.35 Increased By ▲ 0.03 (2.27%)
BR100 4,234 Increased By 53 (1.27%)
BR30 15,412 Increased By 142.2 (0.93%)
KSE100 42,207 Increased By 483.6 (1.16%)
KSE30 15,920 Increased By 174.3 (1.11%)
Follow us

SYDNEY: The Australian and New Zealand dollars looked deflated on Friday, having been dragged from multi-month peaks as markets pumped up pricing for US interest rate hikes. The Aussie traded at $0.7477 after failing to hold a 10-month top of $0.7661 hit early in the week.

Its 0.3% loss for the week meant it was still one of the better performers against a broadly strong US dollar.

The kiwi eased 0.5% for the week to $0.6880 and away from a five-month high of $0.7034.

The fall below the 200-day moving average at $0.6909 risked a break of support at $0.6865.

The Aussie fared better on the crosses, gaining 0.9% for the week on an ailing Japanese yen, while the euro shed 1.4% against the Australian currency and touched a five-year low at A$1.4312.

The frenzy of speculation about higher interest rates globally saw Australian 10-year yields top 3.0% on Friday for the first time since July 2015.

Yet that still lagged the move in Treasuries, leaving the spread at 31 basis points, compared with a top of 50 basis points in March.

Markets fully expect the Reserve Bank of Australia (RBA) to lift its 0.1% cash rate to 0.25% in June and to reach 1.75% by year-end and 3.25% by late 2023.

Australia, NZ dollars left behind as Fed seen going hard on rates

If correct, that would be the most aggressive tightening cycle since the RBA adopted inflation targeting in the early 1990s.

The focus now shifts to the Reserve Bank of New Zealand (RBNZ), amid talk it might hike by a full 50 basis points at its policy meeting next week.

"We expect the RBNZ Board will conclude the upside risks to inflation from the Ukraine/Russia war surpass the downside risks to growth, warranting 50bps hikes in April and May," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities.

"The 'path of least regrets' demands aggressive action to ensure inflation expectations do not rise persistently above target."

The market is almost fully priced for a move to 1.5% next week, and favours 25 basis points in May.

Rates are seen reaching 3.25% by Christmas, a level not visited since July 2015.

Two-year swap rates have already reached 3.57% and trade above 10-year bond yields at 3.48%, suggesting the market sees the risk of a sharp economic slowdown ahead.

Comments

Comments are closed.

Australia, NZ dollars below week's highs as rate frenzy favours US$

Intra-day update: rupee maintains momentum against US dollar

IMF talks: ‘Some understanding’ reached: MoS Pasha

Intra-day update: Bullish run at PSX, KSE-100 up over 500 points

Qatar agrees to buy OGDCL, PPL shares

PM forms body to activate STZA

Primary deficit: Rs500bn waiver sought from IMF

First six months: Fiscal deficit swells to 2pc of GDP

Petrol shortage hits major cities of Punjab

New landfill sites: Govt decides to alter ICT master plan

Joint sitting of parliament: Rabbani deplores non-inclusion of terror issue in agenda