Australian, New Zealand dollars struggle ahead of key data

SYDNEY (REUTERS) – The Australian dollar dipped against a strong greenback on Monday, while the Kiwi dollar fell slightly after a Covid-19 lockdown was extended in its largest city Auckland.

The Aussie edged down 0.7 per cent to US$0.7347, having found support around US$0.7345. That was 1.7 per cent away from its September high of US$0.7455 but far from the recent 10-month trough of US$0.7107.

The kiwi dollar was off 0.22 per cent at US$0.7109 but still at the top end of its three-month range, with a recent three-month top of US$0.7170. The currency has support around US$0.7083.

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

New Zealand’s Prime Minister Jacinda Ardern said on Monday that Auckland would remain in lockdown until midnight on Sept 21 to beat the spread of the Delta variant of the coronavirus.

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 NZD is still likely to outperform,” he added.

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.

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