SYDNEY: The Australian and New Zealand dollars drifted lower on Monday at the start of a week packed with central bank rate decisions and US data releases that will be watched closely by traders trying to discern the path of future interest rate rises.

The Aussie eased 0.2% at $0.7095, having jumped 2.0% the previous week to reach highs not seen since June.

It now faces resistance at last week’s top of $0.7142, with support at $0.7063.

The kiwi dollar was hovering at $0.6493, having firmed 0.3% last week.

It faces resistance at $0.6530, with support around $0.6458.

Trading was cautious ahead of policy meetings from the US Federal Reserve, the European Central Bank (ECB) and the Bank of England (BoE) later this week.

Investors are confident the Fed will raise rates by 25 basis points on Wednesday, followed the day after by 50 basis points hikes from the Bank of England and European Central Bank.

Any deviation from the script would shock markets.

Australia, NZ dollars a tad firmer; all eyes on local CPI

US payrolls data, the employment cost index and various ISM surveys could also move markets. Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, forecasts the Aussie dollar will keep trending up into a range of $0.72 and $0.73 this week.

The US dollar is likely to be volatile this week and its index against six major currencies could dip below 100 points for the first time since April 2022, he added.

China returned from a week-long Lunar New Year holiday, with local shares cheering a strong rebound in consumption after Beijing dropped all COVID-19 curbs in December.

Lunar New Year holiday trips inside China surged 74% from last year, though the number of journeys was still only half of pre-pandemic levels.

The yield on three-year bonds hovered at 3.19%, after surging 21 basis points the prior week, while the yield on 10-year bonds stood at 3.569%, after jumping 17.8 basis points the previous week.