Australia, NZ dollars chased lower as data disappoints bulls

- Advertisement -


SYDNEY, Nov 17 (Businesshala) – The Australian and New Zealand dollars came under fire again on Wednesday after a batch of US economic data lifted their US counterpart, while domestic news disappointed bulls.

- Advertisement -

The Aussie plunged to a new five-week trough of $0.7275, down 0.7% overnight on firm retail and industrial data. A breach of the support at $0.7277 could lead to a retest of the September low of $0.7171.

- Advertisement -

The Kiwi Dollar declined 0.8% overnight to $0.6984 and there was a threat to the support near $0.6980. A breakout would open the way to its September low of $0.6860.

Australians were further shocked when Australian wage data failed to beat expectations as few in the market were betting on the market.

- Advertisement -

Forecast annual wage increases ticked up to a moderate 2.2%, while bulls expected a higher result to strengthen the case for an initial rate hike from the Reserve Bank of Australia (RBA).

Chief Economist Paul Bloxham said, “It is clear that wage growth is well below the 3-4% rates that were the norm a decade ago and the kind of rates the RBA should believe inflation will continue to run at 2-3%.” ” Australia at HSBC.

“Today’s figures support the RBA’s liberal outlook and our own view on the cash rate outlook – with our central case being no hikes in 2022 or 2023.”

This saw a slight increase in the futures market, with a move of 0.25%, with the price now moving up to July of next year instead of fully June. Yet swap rates are approaching 1% by the end of the year.

The Reserve Bank of New Zealand (RBNZ) has already started its tough campaign and is expected to rise again next week. The swap is meant to move the price completely to 0.75%, and that means there is a 36% chance of a half-point increase to 1.0%.

In fact, the market is set to rate above 2% by the end of next year and around 3% in 2024.

“We think 3%-plus is too high at this level,” said analysts at KiwiBank. “We expect the RBNZ to stall around 2%, and the bank’s own rate track is likely to peak around 2.4%.” (Editing by Jacqueline Wong)

,

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox