AGL 39.50 Increased By ▲ 1.78 (4.72%)
AIRLINK 177.35 Increased By ▲ 8.70 (5.16%)
BOP 10.09 Increased By ▲ 1.00 (11%)
CNERGY 6.85 No Change ▼ 0.00 (0%)
DCL 9.91 Decreased By ▼ -0.14 (-1.39%)
DFML 43.25 Increased By ▲ 2.61 (6.42%)
DGKC 98.65 Increased By ▲ 5.41 (5.8%)
FCCL 39.15 Increased By ▲ 1.23 (3.24%)
FFBL 82.49 Increased By ▲ 3.77 (4.79%)
FFL 14.39 Increased By ▲ 0.93 (6.91%)
HUBC 121.52 Increased By ▲ 7.42 (6.5%)
HUMNL 15.30 Increased By ▲ 0.35 (2.34%)
KEL 5.70 Decreased By ▼ -0.05 (-0.87%)
KOSM 8.15 Decreased By ▼ -0.08 (-0.97%)
MLCF 48.21 Increased By ▲ 2.72 (5.98%)
NBP 75.50 Increased By ▲ 0.58 (0.77%)
OGDC 197.75 Increased By ▲ 4.82 (2.5%)
PAEL 32.15 Decreased By ▼ -0.09 (-0.28%)
PIBTL 8.15 Decreased By ▼ -0.42 (-4.9%)
PPL 177.05 Increased By ▲ 9.67 (5.78%)
PRL 34.11 Increased By ▲ 3.10 (10%)
PTC 22.60 Increased By ▲ 0.52 (2.36%)
SEARL 103.00 Increased By ▲ 2.17 (2.15%)
TELE 8.45 No Change ▼ 0.00 (0%)
TOMCL 35.13 Increased By ▲ 0.29 (0.83%)
TPLP 11.20 Decreased By ▼ -0.04 (-0.36%)
TREET 19.29 Increased By ▲ 0.66 (3.54%)
TRG 58.50 Decreased By ▼ -2.24 (-3.69%)
UNITY 34.80 Increased By ▲ 2.82 (8.82%)
WTL 1.59 Decreased By ▼ -0.02 (-1.24%)
BR100 11,651 Increased By 362.1 (3.21%)
BR30 35,478 Increased By 1338.1 (3.92%)
KSE100 108,239 Increased By 3134.6 (2.98%)
KSE30 33,694 Increased By 1139.4 (3.5%)
Markets

Australia, NZ dollars rebuffed by resistance, fret on yuan fall

The Aussie faded 0.4pc to $0.6592, having reached an 11-week top of $0.6680 on Wednesday only to stall short of res
Published May 28, 2020
  • The Aussie faded 0.4pc to $0.6592, having reached an 11-week top of $0.6680 on Wednesday only to stall short of resistance at $0.6685.
  • It also failed to sustain a break of the 200-day moving average at $0.6658, and now looks set to test support around $0.6568.
  • The kiwi dollar eased to $0.6174, from a 10-week peak of $0.6232, and now has support at $0.6150.

SYDNEY: The Australian and New Zealand dollars edged back on Thursday after the failure to breach major chart highs led to profit taking on recent gains, while a drop in the yuan provided an extra reason to sell.

The Aussie faded 0.4pc to $0.6592, having reached an 11-week top of $0.6680 on Wednesday only to stall short of resistance at $0.6685.

It also failed to sustain a break of the 200-day moving average at $0.6658, and now looks set to test support around $0.6568.

The kiwi dollar eased to $0.6174, from a 10-week peak of $0.6232, and now has support at $0.6150.

The Aussie was sold in part as a liquid proxy for the Chinese yuan which has been sliding in recent days as a war of words with Washington heated up.

The offshore yuan hit a record low of 7.1966 per dollar overnight, stirring speculation Beijing would let the currency depreciate as a trade lever against the United States.

That risk offset upbeat comments from Reserve Bank of Australia (RBA) Governor Philip Lowe who held out hope the economic downturn might be less severe than first feared, given the country's success in containing the coronavirus.

Yet he also warned the way ahead would be tough and interest rates would have to remain at all-time lows for years to come, helping keep 10-year bond yields down at 0.89pc.

Three-year bond futures were steady at 99.740, staying snug to the RBA's yield target of 0.25pc.

The economic challenge was underlined by data on business investment which showed a 1.6pc drop in the March quarter and a sharp decline in spending plans for 2020/21.

"The downgrade was the first at this early stage of the planning cycle since the 1990s recession, and the largest since at least the mid 1970s," said NAB economist Kaixin Owyong.

"The 2019-20 estimate points to a roughly 16pc fall in nominal investment in Q2," she added. "The data underscore the importance of restoring confidence and supporting business investment for the recovery to be sustained."

Comments

Comments are closed.