SYDNEY/WELLINGTON: The Australian dollar traded near the lower end of its five-and-a-half week range against the greenback on Monday, as the country’s central bank is seen lagging global peers in tightening monetary policy despite a strong economic recovery.

Its New Zealand counterpart was also trading sideways and at the lower end of its multi-week range, ahead of a monetary policy decision this week and as data showed retail sales volumes rose in the first quarter.

The Aussie was trading 0.05% higher at $0.7735. The commodity-price sensitive currency has traded between $0.7675 and $0.7891 since April 15, as sky-rocketing commodities prices have prompted China’s government to curb “unreasonable” cost increases.

The New Zealand dollar edged 0.15% higher to $0.7174, trading around the midpoint of its range since mid-April of between $0.7117 and $0.7304.

Australia’s 10-year bond yields were two basis points lower at 1.65%, a spread of 4 basis points above US yields.

“Unlike last year, markets have now largely (if not fully) priced in a global V-shaped recovery that was aided both by policy and positive vaccine developments,” Morgan Stanley strategists said in a note. “2Q21 will be the ‘last hurrah’ for AUD/USD strength...we think AUD/USD will begin to diverge from risk assets as the primary driver of the AUD shifts from global risk demand and global growth to policy divergence.”