SYDNEY: The Australian and New Zealand dollars were pinned near recent lows yesterday as yield spreads widened in favour of their US counterpart and speculators eyed breaks of major chart support.
The Aussie was stuck at US$0.6422, perilously close to its recent two-year trough of US$0.6399. The next bear target is a low from 2022 at US$0.6170.
The New Zealand dollar was flat at US$0.5639, again not far from a two-year low of US$0.5608. Its 2022 nadir is at US$0.5512.
A dovish shift by the Reserve Bank of Australia (RBA) this month led investors to price in a roughly 50-50 chance of a rate cut as early as February.
“The RBA minutes adopted an explicit easing bias for the first time this cycle, while highlighting weaker-than-expected outcomes across consumption, wages growth and housing-related inflation,” noted Goldman Sachs economist Andrew Boak.
“We continue to expect the RBA to commence a gradual easing cycle in February, conditional on a soft outcome in the trimmed mean consumer price index (CPI).” — Reuters
