Tag Archives: FOREX /

Australia, demand for NZ dollars due to economy, outperformed commodities | Instant News


SYDNEY, March 3 (Reuters) – The Australian and New Zealand dollars edged up on Wednesday as upbeat economic news at home and strengthening global commodity prices bolstered sentiment, while bonds calmed after last week’s unrest.

The Aussie was up to $ 0.7835 and is further from Friday’s low of $ 0.7693, which took a hit when surging global bond yields knocked investors out of riskier assets.

It faces a layer of resistance from $ 0.7845 to $ 0.7915, and remains well off last week’s three-year peak of $ 0.8007.

The kiwi rebounded to $ 0.7302, after briefly dipping to $ 0.7210 overnight. Resistance lies around $ 0.7305 and $ 0.7360.

Australian data showed the economy grew at a rapid pace of 3.1% in the December quarter, easily topping the 1.5% forecast and the strongest back-to-back quarterly performance in the series’ 60 year history.

Gross domestic product is still down 1.1% this year, reflecting the devastating damage done during the lockdown pandemic, but all the signs are activity remains strong with free consumer spending.

The bond market welcomed the data calmly given the Reserve Bank of Australia (RBA) recently committed back to keeping policy very easy.

The central bank is determined to push wages and inflation much higher before tightening, and there is little evidence of a domestically driven inflation in the GDP report.

However, the prospect of rapid growth appears to be confirming much of the recent increase in yields, even if the pace of that movement is exaggerated.

“We think the pressure on the RBA is increasing,” said Nomura economist Andrew Ticehurst. “Data continues to beat consensus, house price momentum appears to be accelerating, and rising job advertisements bodes well for future job growth.”

He now doubts the RBA will extend its three-year yield target to November 2024 bonds. He also opted to buy the Aussie against the euro given the different growth dynamics in their economies.

The implied three-year yield in the futures market is trading around 0.30%, suggesting investors believe the RBA should raise its target 0.1% over time.

While the yields on the 10-year paper have stabilized at 1.71%, from their recent peak of 1.97%, they are still up 73 basis points this year.

Kiwis are benefiting themselves from the latest auction of dairy products, the country’s biggest export of goods, which saw prices jump 15%. The price of powdered milk jumped 21% to the highest level in seven years, promising a windfall for farmers. (Reporting by Wayne Cole; Editing by Muralikumar Anantharaman)

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Australia, NZ dlrs recover from bond market turmoil | Instant News


SYDNEY, March 1 (Reuters) – The Australian and New Zealand dollars recovered against the greenback on Monday after risk currencies fell late last week amid a sell-off on global bond markets.

The Aussie dollar was 0.69% higher at $ 0.7759, but still well below a three-year high of $ 0.8007 reached on Feb 25.

The Kiwi dollar was 0.66% higher at $ 0.7273 but down from the $ 0.7464 level it also reached on February 25, which was the highest since August 2017.

The currencies of Australia and New Zealand have risen in recent months due to a combination of soaring commodity prices, as well as the recovery of their domestic economies and housing markets from the COVID-19 crisis.

But optimism about the global economic recovery, supported by unprecedented fiscal and monetary stimulus, has fueled concerns about inflation and monetary tightening, sending rising global bond yields and weighing on riskier currencies.

“A number of Australian states have retreated from a recession sparked by last year’s lockdown and are growing at a pace above the trend … with vaccination launches now underway, the road to normalization looks more secure,” said Richard Yetsenga, chief economist at ANZ.

Australian debt, following a sell-off in global bond markets last week, is also rebounding from some of the biggest price losses in years seen on Friday.

The yield on the 10-year Australian 10-year bond fell 11 basis points to 1.64% after hitting 1.97% on Friday, the highest since May 2019 and up from below 1% in early January.

“Even though the prospect of nominal growth is rapidly improving, the central bank remains firmly committed to maintaining very accommodative policies,” added Yetsenga. “AUD and NZD have been the main beneficiaries of this trade, so far.”

New Zealand’s central bank governor on Friday reiterated that the bank will maintain its current easy policy setup for an extended period of time, saying it was wise to be patient.

Edited by Ana Nicolaci da Costa

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Australia, NZ dlrs at the highest levels due to yields, commodities reached their peak | Instant News


SYDNEY, Feb 25 (Reuters) – The Australian and New Zealand dollars rose to multi-year peaks on Thursday as the global rush into a reflex game swung commodity prices and bond yields sharply in their favor.

The Aussie is enjoying cleared air at $ 0.7960, having hit an unvisited high since early 2018 of $ 0.7979. It is up 1.2% on the week as momentum funds pile up on the break of major chart barriers, particularly against the yen and euro.

The next targets are the psychological 80 cents level and the January 2018 peak of $ 0.8136.

The kiwi dollar rose to $ 0.7430, clearing 2018 peaks to hit levels not seen since August 2017. The next major target is the all-year 2017 peak of $ 0.7557, and a break there will take it to levels last visited in mid 2015.

“For Australia, the combination of rising commodity prices and viable export volumes means that resource-related export revenues have been healthy,” said CBA Australia’s chief economist, Gareth Aird.

“Prices are expected to remain high and that will produce a large sustainable trade surplus which will support the Australian dollar.”

Miners have already paid bumper tax and dividends in Australia, so convert the US dollars earned into Australian dollars.

The reflective trading has combined with upbeat economic data at home to drive the big gains in bond yields far beyond those seen in the US.

Australia’s 10-year yield surged up to 1.705%, the highest since May last year and surged 29 basis points this week alone. The spread on Treasuries expanded to 30 basis points, from zero a few weeks ago.

The Reserve Bank of Australia (RBA) stepped in on Thursday to buy A $ 3 billion in 2023-2024 bonds aimed at stopping the three-year yield from rising further above its 0.10% target.

It had limited success dragging the three-year yield to 0.14%, from a high of 0.168%.

In New Zealand, the 10-year yield has rocketed 33 basis points so far this week to hit 1.865%, the biggest weekly gain since 2013.

The Reserve Bank of New Zealand (RBNZ) on Wednesday pledged to be patient on policy and not tighten for some time, although noting that global moves in yields were beyond its control.

The country’s government has also recently mandated the RBNZ’s payroll account for house prices when setting policy, a tricky task given the record low prices have seen prices soar in recent months. (Reporting by Wayne Cole; Editing by Christopher Cushing)

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FOREX-Dollar fell as risk appetite increased, the kiwi was scrambled by the RBNZ | Instant News


    * Increase in risk appetite hurts dollar
    * Kiwi dips but then erases losses after RBNZ decision
    * Powell emphasises low rates here to stay

    By Stanley White
    TOKYO, Feb 24 (Reuters) - The dollar slipped to a three-year
low against the British pound and fell against commodities
currencies on Wednesday as investors increased bets that a
global economic recovery will boost riskier assets.
    The New Zealand dollar briefly fell but then quickly
stabilised after the country's central bank kept monetary policy
on hold and said inflation and employment will remain below its
targets in the medium term.
    U.S. Federal Reserve Chair Jerome Powell reiterated on
Tuesday that interest rates will remain low and the Fed will
keep buying bonds to support the U.S. economy, which many
traders say is a long-term negative factor for the dollar.
    At the same time, more money is flowing toward currencies
that are expected to benefit from a pick-up in global trade and
to countries that are bouncing back quickly from the coronavirus
pandemic, which is also weighing on the dollar.
    "Signs of economic recovery are lifting commodities prices,
which in turn supports currencies of commodities exporters,"
said Junichi Ishikawa, foreign exchange strategist at IG
Securities.
    "Risk appetite has improved a lot, and this leaves the
dollar at a big disadvantage."
    The British pound rose to $1.4170, the highest
since April 2018.
    The outlook for sterling has brightened as investors cheer
Britain's rapid coronavirus vaccination programme and its plans
to ease lockdown restrictions on economic activity.
    The New Zealand dollar edged up to $0.7367, close
to a three-year high.
    The Reserve Bank of New Zealand expressed some caution about
the outlook, which may have disappointed some traders who
expected central bankers to acknowledge a recent improvement in
economic data.   
    The Australian dollar, which tends to benefits from
rising metal and energy prices, jumped to a three-year high of
$0.7945.
    Against the euro, the dollar traded at $1.2158,
close to a six-week low.
    The dollar managed to rise to 105.40 Japanese yen
and hit an almost three-month high against the Swiss franc
, but overall sentiment was still negative on the
greenback.
    Powell pushed back against suggestions that loose monetary
policy will lead to runaway inflation and financial bubbles,
which have emerged as two important themes this year, because
there is growing scepticism about the rapid pace of gains in
global stocks.
    For economies that have limited disruptions caused by the
coronavirus outbreak, their central bankers now face questions
of when to start tightening policy, which makes the dollar look
less attractive, some analysts say.
    The dollar index against a basket of six major
currencies fell to 90.025.
    In the cryptocurrency market, bitcoin halted its
plunge from a record high above $50,000 and stabilised at
$49,052. Square Inc has invested $170 million in the
digital asset, but some analysts still argue that bitcoin's
recent surge was excessive.
    Rival digital currency ether recovered from a
sharp sell-off to trade up slightly at $1,591.
        
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    Currency bid prices at 0129 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.2158        $1.2150     +0.07%         -0.49%      +1.2164     +1.2143
 Dollar/Yen                   105.4000       105.2600    +0.21%         +2.13%      +105.4800   +105.2400
 Euro/Yen                     128.15         127.86      +0.23%         +0.97%      +128.2300   +127.7800
 Dollar/Swiss                 0.9058         0.9054      +0.06%         +2.40%      +0.9064     +0.9048
 Sterling/Dollar              1.4190         1.4112      +0.55%         +3.86%      +1.4235     +1.4111
 Dollar/Canadian              1.2569         1.2590      -0.16%         -1.29%      +1.2596     +1.2560
 Aussie/Dollar                0.7938         0.7909      +0.37%         +3.19%      +0.7945     +0.7903
 NZ                           0.7367         0.7343      +0.33%         +2.59%      +0.7377     +0.7317
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ

    
 (Reporting by Stanley White; editing by Richard Pullin)
  

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Australia, the New Zealand dollar hovers near multi-year highs amid a commodity boom | Instant News


SYDNEY, Feb 23 (Reuters) – The Australian and New Zealand dollars were little changed on Tuesday, hovering near multi-year highs amid surging commodity prices and a weak dollar, while bond yields were steady.

The Aussie dollar is up 0.14% higher at $ 0.7925 after crossing the $ 0.79 mark for the first time since early 2018 the previous day. The currency’s next target is $ 0.80, said the strategist.

The kiwi dollar fell 0.05% against the greenback to $ 0.7324, having stretched as far as $ 0.7343 in the previous session, the highest since April 2018, as yields surged and S&P upgraded New Zealand’s rating to AA +, citing surprising strength from the economy.

Rising prices for materials from oil and copper to wood and powdered milk have pushed currencies such as the Australian and New Zealand dollars to their highest levels in nearly three years.

Copper prices surged above $ 9,000 per tonne for the first time since 2011 on Monday, while nickel traded above $ 20,000 per tonne for the first time since 2014.

“Dividend announcements for Australian mining companies that are likely to declare in US $ and offer payouts in A $, and the prospect of a larger dividend at the end of the year adds to the A $ demand story,” Westpac analysts said in a note.

The ten-year bond yield in Australia fell four basis points to 1.55% on Tuesday after rising sharply in recent days as fears of faster global inflation have hit bond markets.

The three-year bond is up 2 ticks to 99.7550, and the 10-year bond is up 4 ticks 98.4350.

In New Zealand, the 10-year yield was up one basis point at 1.65%, after hitting 1.72%, the highest since March 23 as markets await this year’s first monetary policy meeting on February 24.

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