AGL 5.95 Decreased By ▼ -0.13 (-2.14%)
ANL 9.26 Decreased By ▼ -0.14 (-1.49%)
AVN 80.82 Decreased By ▼ -0.64 (-0.79%)
BOP 5.20 Decreased By ▼ -0.07 (-1.33%)
CNERGY 4.86 Decreased By ▼ -0.04 (-0.82%)
EFERT 81.82 Increased By ▲ 0.27 (0.33%)
EPCL 53.94 Decreased By ▼ -0.06 (-0.11%)
FCCL 14.29 Decreased By ▼ -0.11 (-0.76%)
FFL 5.93 Decreased By ▼ -0.12 (-1.98%)
FLYNG 7.44 Decreased By ▼ -0.12 (-1.59%)
FNEL 4.95 Decreased By ▼ -0.05 (-1%)
GGGL 9.18 Decreased By ▼ -0.14 (-1.5%)
GGL 16.51 Decreased By ▼ -0.19 (-1.14%)
HUMNL 6.14 Increased By ▲ 0.45 (7.91%)
KEL 2.77 Decreased By ▼ -0.02 (-0.72%)
LOTCHEM 30.81 Increased By ▲ 0.26 (0.85%)
MLCF 27.45 Decreased By ▼ -0.34 (-1.22%)
OGDC 74.27 Increased By ▲ 0.27 (0.36%)
PAEL 15.98 Decreased By ▼ -0.21 (-1.3%)
PIBTL 5.21 Decreased By ▼ -0.02 (-0.38%)
PRL 17.01 Decreased By ▼ -0.28 (-1.62%)
SILK 1.10 Increased By ▲ 0.01 (0.92%)
TELE 10.00 Decreased By ▼ -0.04 (-0.4%)
TPL 7.65 Decreased By ▼ -0.05 (-0.65%)
TPLP 19.41 Decreased By ▼ -0.36 (-1.82%)
TREET 22.72 Decreased By ▼ -0.47 (-2.03%)
TRG 146.80 Decreased By ▼ -0.55 (-0.37%)
UNITY 17.09 Decreased By ▼ -0.10 (-0.58%)
WAVES 10.33 Decreased By ▼ -0.05 (-0.48%)
WTL 1.42 Decreased By ▼ -0.04 (-2.74%)
BR100 4,330 Increased By 3.4 (0.08%)
BR30 16,296 Increased By 46.9 (0.29%)
KSE100 42,904 Increased By 23.3 (0.05%)
KSE30 15,805 Decreased By -4.6 (-0.03%)
Follow us

SYDNEY: The Australian and New Zealand dollars held solid gains for the week on Friday and looked set to break some major chart barriers as their U.S. counterpart came under broad-based pressure.

The Aussie was holding at $0.6667, having added 1.2% for the week so far to be well away from the $0.6585 trough hit early in the week. Resistance lies at the November top of $0.6797 and a break would open the way to the 200-day moving average at $0.6936.

The kiwi dollar was poised at $0.6256, having climbed 1.6% for the week and off a low of $0.6091. That was within a whisker of the 200-day MA at $0.6299, a barrier not breached since April.

The kiwi was still benefiting from an ultra-hawkish outlook by the Reserve Bank of New Zealand (RBNZ) which not only hiked rates by a record 75 basis points to 4.25% this week, but also flagged further rises to as high as 5.5%.

Markets have quickly priced in another 75 basis points when the RBNZ next meets in February, while the yield curve clearly signals recession ahead.

Two-year yields were up a steep 35 basis points for the week at 4.63%, while 10-year yields barely changed as markets priced in rate cuts for 2024.

That left 10-year yields a huge 48 basis points below the short-end and turned the curve to the most inverted since the global financial crisis in 2008.

“We don’t disagree with the RBNZ’s view of a higher rate peak but doubt its optimistic outlook that 5.5% will result in only a ‘shallow’ recession based on its forecasts,” said Alex Loo, a macro strategist at TD Securities.

“While the risk is that the RBNZ may bring rates to a peak quickly, we think the Bank may also be swift to cut interest rates once inflation eases back from its peak more quickly than it expects and huge job losses are realised.”

The Reserve Bank of Australia (RBA) is on a far different track, having slowed the pace of hikes precisely because it wants to avoid a recession.

Investors are wagering it will lift rates by another quarter point to 3.10% in December and top out at just 3.85%, far short of the RBNZ’s target.

That relatively dovish view means the Australian yield curve is nowhere near inverting, with 10-year yields 30 basis points above the two-year at 3.57%.

Comments

1000 characters

Australia, NZ dollars look to extend rally past major resistance

'We stand by our promise': Moonis Elahi says will dissolve Punjab assembly on Imran's call

PM Shehbaz urges Turkiye to invest in Pakistan's mega solar project

Ishaq Dar says Pakistani delegation to leave for Russia for potential oil deal

Pakistan secures €150mn in aid from ECO Trade and Development Bank: Marriyum

Saudi Arabia blocks Qatari beIN’s World Cup streaming platform

Lewandowski breaks World Cup duck as Poland beat Saudi Arabia

Nine terrorists killed in gun battle with security forces in Balochistan: ISPR

Ronaldo’s ‘total genius’ won World Cup penalty, says FIFA group

Relations with India, gender equality stressed at ‘talks by engro’ event in IBA

Owned by resident Pakistanis: FBR starts taxing hundreds of foreign properties