The Australian dollar held near a 3-month peak on Monday following solid manufacturing activity in top trading partner China and mostly positive economic indicators at home, while its New Zealand counterpart hovered near a 5-month high. Australia's job market is finally showing some signs of life while house prices in the country's capital cities have come off the boil, cementing expectations of steady interest rates in coming months.
The Australian dollar stood at $0.7684, within a whisker of $0.7712 hit on Friday. It rose 3.5 percent in June to clock its best monthly performance since January. Investors will closely watch the Reserve Bank of Australia's (RBA) monthly policy meeting on Tuesday where it is sure to keep the official cash rate at a record low 1.50 percent.
Even as policy makers in the United States and Europe turn hawkish, the RBA will likely stay neutral given worries about record high household debt and weak wages growth. In a welcome sign for the RBA, data out on Monday showed Australian job advertisements climbed for a fourth straight month in June - confirming the recent marked improvement in the official measures of labour demand.
The Australian dollar is typically used as a liquid proxy for China plays. The New Zealand dollar held near a five-month high, helped by a weakening greenback. The Kiwi hit $0.7347 on Friday, its highest since February, before consolidating around $0.7325 on Monday. It faces chart resistance around $0.7350, according to technical analysts.
New Zealand government bonds eased, sending yields 6 basis points higher at the long end of the curve. Australian government bond futures fell again, with the three-year bond contract down 3 ticks at a 3-1/2 month trough of 97.990. The 10-year contract slipped 4 ticks to 97.3100, the lowest since May 12.
Comments
Comments are closed.