SYDNEY: The New Zealand dollar fell on Monday as traders pared back bets the central bank could surprise with an interest rate hike this week, while the Australian dollar was also vulnerable ahead of a monthly inflation test.
The kiwi fell 0.5% to $0.6164, after jumping 1.2% last week on risk that the Reserve Bank of New Zealand (RBNZ) may hike this week. However, some of that risk faded on Monday, reflected in the two-year swap rate falling six basis points from a three-month top to 5.1850%.
The Australian dollar slipped 0.2% to $0.6551, having ended last week little changed. The currency is struggling to break its 200-day moving average of $0.6563.
The two face a pivotal week with the New Zealand’s central bank meeting and Australia’s inflation data both on Wednesday. Inflation readings in the US and Europe also represent risk factors.
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