SYDNEY: The Australian and New Zealand dollars were trying to sustain a rally on Tuesday as speculators took some profits on short positions and Australia’s central bank signalled another rate hike was on the cards for June.
The Aussie clambered up to $0.6996 and away from a two-year trough of $0.6829 touched last week. Resistance now lies at $0.7030 and $0.7055.
The kiwi firmed to $0.6327, having bounced from $0.6229 support overnight. Still, a break above $0.6400 was needed to improve the bearish technical background.
The fact the currencies could rally at all, considering Monday’s dire economic data from China, suggested both were oversold and due a break from selling.
“While tentative, AUD/USD may be finding a base as market participants digest the news that the Chinese economy will be weak until the lockdowns ease,” said Joseph Capurso, head of international economics at CBA.