SINGAPORE: The Australian and New Zealand dollars sat in the top half of well-established ranges on Wednesday, as a wobbly US dollar offsets concern about a slowdown in global trade.
The Aussie, which is historically sensitive to global growth and trade thanks to Australia’s commodity exports, found support at $0.63 and bought $0.6320 in afternoon trade.
The kiwi dollar held steady at $0.5733 for a gain so far in March of 2.4% on the US dollar.
Neither has broken free of a roughly three-cent band that has contained them this year, even as global markets have been roiled by the reversal of bets on a stronger US dollar as the US has imposed import tariffs.
“It’s a pretty tight range given how much has been going on,” said Su-Lin Ong, chief economist at RBC Capital Markets in Sydney, as the Aussie has navigated an Australian rate cut, some strong domestic data and a rollercoaster few weeks in markets.
“There’s obviously a confluence of factors pulling in multiple directions,” she said.
Fears of a sharp economic slowdown in the US have hit risk assets, but a generally weaker US dollar on the back of lower yields has offered some breathing room for the Antipodeans.
Australia, NZ dollars sink on soaring euro; steady vs dollar
“Our sense is overall the global developments are negative for the Aussie dollar,” Ong said.
“Lower global trade and global growth don’t bode particularly well, we would say, for the Aussie dollar. So our preference is if it moved much higher, we would probably be better sellers up towards the top of that range.”
One area where there has been a breakout move are euro crosses, as Europe’s common currency has shot to post-pandemic highs on the Australian and New Zealand dollars on the prospect of Ukraine and Russia agreeing to a month-long ceasefire. Aussie 10-year bond futures were steady at 95.55.
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