Aussie, NZ currencies struggle ahead of key data

SYDNEY • The Australian dollar dipped against a strong greenback yesterday, while the Kiwi dollar fell slightly after a Covid-19 lockdown was extended in New Zealand's largest city Auckland.

The Australian dollar edged down 0.7 per cent to 73.47 US cents, having found support around 73.45 US cents. That was 1.7 per cent away from its September high of 74.55 US cents but far from the recent 10-month trough of 71.07 US cents.

The New Zealand dollar was off 0.22 per cent at 71.09 US cents but still at the top end of its three-month range, with a recent top of 71.7 US cents. The currency has support at around 70.83 US cents.

Investors were cautious ahead of a Reserve Bank of Australia speech and job data today, as well as economic growth numbers for the second quarter in New Zealand on Thursday, analysts said.

New Zealand's Prime Minister Jacinda Ardern yesterday said Auckland would remain in lockdown until midnight next Tuesday to beat the spread of the Delta variant of Covid-19.

JPMorgan economists expect strong growth of 1.7 per cent for the June quarter, driven by household consumption. The Reserve Bank of New Zealand will have to balance the outcome against lower business and consumer confidence since last month due to the lockdowns when deciding whether to hike rates next month.

Data from Statistics New Zealand showed food prices rose 0.3 per cent last month, the lowest level since March.

"There had been some discussion around a possible 50 basis points hike (but) today's food price numbers will cool the 50 basis points-hike crowd," said Western Union Business Solutions currency strategist Steven Dooley. "The NZ dollar is still likely to outperform."

A strong US dollar was also weighing on the antipodean currencies, traders said.

Bond prices were lower, pushing New Zealand bond yields about two basis points higher across the curve.

Across the Tasman Sea, yields on Australia's 10-year paper were also two basis points higher at 1.26 per cent, while three-year yields fell two basis points to 0.255 per cent.

REUTERS

A version of this article appeared in the print edition of The Straits Times on September 14, 2021, with the headline 'Aussie, NZ currencies struggle ahead of key data'. Subscribe