Australia, New Zealand dollars stall as rallies run into resistance
The Aussie slipped 0.1% at $0.6481 after having retreated from a six-month peak of $0.6537 overnight when it finished 0.1% lower.
There's now stiff resistance at $0.6515 while solid support lies at its 200-day moving average of $0.6447.
It has surged 10% since early April. The kiwi dollar eased 0.2% to $0.5988.
It hit a six-month top of $0.6031 overnight and finished 0.2% higher.
Resistance is strong at $0.6029, with support at the 200-day moving average of $0.5877.
Overnight, the sell-off in the US dollar steadied a little after US President Donald Trump flip flopped again on his latest tariff threat against Europoe.
That helped the two Antipodeans break higher but ultimately they were not able to hold onto the gains in a holiday thinned session.
'We have a constructive view on both antipodean currencies, but it is fair to say that near term the AUD is finding it difficult to sustain breaks above 0.65 while the kiwi is facing resistance around the 0.6030 area,' said Rodgrigo Catril, senior FX strategist at the National Australia Bank. The next catalyst is most likely to be a central bank policy decision in New Zealand on Wednesday.
The RBNZ is widely expected to cut interest rates to 3.25%, though uncertainty remains about where rates will bottom. Swaps imply a quarter-point rate cut has been fully priced in, with rates set to hit 2.85% later this year.
Australia, New Zealand dollars gain but face stiff chart resistance
'We see the RBNZ's OCR profile being revised down by around 20bp to around 2.9% by the end of 2025. A broadly flat profile beyond 2025 seems likely,' said analysts at Westpac. 'The very short term assumption for Q3 2025 is likely to leave the RBNZ the option to cut the OCR in either of July or August.'
Australian monthly inflation data is also due on Wednesday and analysts are expecting the monthly rate to have eased to 2.3% in April from 2.4% the previous month.
The report is heavily focused on goods rather than services in the first month of the quarter, and usually does not have a significant bearing on policy rates.
A rate cut from the Reserve Bank of Australia in July is now priced at a 67% probability, with a total of 80 basis points in easing expected by early next year.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
30 minutes ago
- Business Recorder
Bulls take control of PSX as shares climb 1,500 points
Bullish momentum was observed at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 Index hovering near 147,000 level during the intra-day trading on Monday. At 3:15pm, the benchmark index was hovering at 146,910.57 level, an increase of 1,527.78 points or 1.05%. Buying was observed in key sectors including automobile assemblers, commercial banks, oil and gas exploration companies and refinery traded in the green. Index-heavy stocks including ARL, NRL, MARI, POL, HBL, MCB, MEBL and UBL traded in the green. Analysts attributed the positive momentum to several positive macroeconomic and corporate factors. 'The continuity of the IMF programme' is providing policy stability and ensuring the implementation of critical fiscal and structural reforms, Saad Hanif, Head of Research at Ismail Iqbal Securities, told Business Recorder. 'This is complemented by a better external and fiscal account position.' The market expert added that the investor sentiments are further bolstered by attractive valuations, making equities appealing compared to other asset classes, including real estate, which remains largely stagnant. Moreover, strong corporate performance, with several listed companies reporting all-time high profits, is also adding to the momentum. 'All this makes a very good ground for the ongoing rally,' he said. During the previous week, PSX extended its winning streak with the benchmark KSE-100 Index surging by 4,348 points, or 3.1%, to close at an all-time high of 145,383. Internationally, major share indexes crept higher in Asia on Monday as upbeat company earnings underpinned high valuations in the tech sector, while a crucial report on US inflation would likely set the course of the dollar and bonds. Trade and geopolitics also loom large with a US tariff deadline on China due to expire on Tuesday amid expectations it will get extended again, while President Donald Trump and Russian leader Vladimir Putin are due to meet in Alaska on Friday to discuss Ukraine. The main economic release will be US consumer prices on Tuesday, with analysts expecting the impact of tariffs to help nudge the core up 0.3% to an annual pace of 3.0% and away from the Federal Reserve target of 2%. An upside surprise would challenge market wagers for a September rate cut, though analysts assume it would have to be a very high number, given a downward turn in payrolls is now dominating the outlook. Markets imply around a 90% probability of a September easing, and at least one more cut by year-end. Trump's pick for Fed governor, Stephen Miran, may or may not be in place in time to vote for a cut in September, while the choice of a new chair has broadened out to around 10 contenders. The prospect of lower borrowing costs has supported equities, along with a run of strong earnings. This is an intra-day update
Business Recorder
an hour ago
- Business Recorder
Bulls take control of PSX as shares climb 1,300 points
Bullish momentum was observed at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 Index crossing the 146,000 level during the intra-day trading on Monday. At 3pm, the benchmark index was hovering at 146,657.58 level, an increase of 1,274.79 points or 0.88%. Buying was observed in key sectors including automobile assemblers, commercial banks, oil and gas exploration companies and refinery traded in the green. Index-heavy stocks including ARL, NRL, MARI, POL, HBL, MCB, MEBL and UBL traded in the green. Analysts attributed the positive momentum to several positive macroeconomic and corporate factors. 'The continuity of the IMF programme' is providing policy stability and ensuring the implementation of critical fiscal and structural reforms, Saad Hanif, Head of Research at Ismail Iqbal Securities, told Business Recorder. 'This is complemented by a better external and fiscal account position.' The market expert added that the investor sentiments are further bolstered by attractive valuations, making equities appealing compared to other asset classes, including real estate, which remains largely stagnant. Moreover, strong corporate performance, with several listed companies reporting all-time high profits, is also adding to the momentum. 'All this makes a very good ground for the ongoing rally,' he said. During the previous week, PSX extended its winning streak with the benchmark KSE-100 Index surging by 4,348 points, or 3.1%, to close at an all-time high of 145,383. Internationally, major share indexes crept higher in Asia on Monday as upbeat company earnings underpinned high valuations in the tech sector, while a crucial report on US inflation would likely set the course of the dollar and bonds. Trade and geopolitics also loom large with a US tariff deadline on China due to expire on Tuesday amid expectations it will get extended again, while President Donald Trump and Russian leader Vladimir Putin are due to meet in Alaska on Friday to discuss Ukraine. The main economic release will be US consumer prices on Tuesday, with analysts expecting the impact of tariffs to help nudge the core up 0.3% to an annual pace of 3.0% and away from the Federal Reserve target of 2%. An upside surprise would challenge market wagers for a September rate cut, though analysts assume it would have to be a very high number, given a downward turn in payrolls is now dominating the outlook. Markets imply around a 90% probability of a September easing, and at least one more cut by year-end. Trump's pick for Fed governor, Stephen Miran, may or may not be in place in time to vote for a cut in September, while the choice of a new chair has broadened out to around 10 contenders. The prospect of lower borrowing costs has supported equities, along with a run of strong earnings. This is an intra-day update
Business Recorder
an hour ago
- Business Recorder
Pakistan, US finalizing trade deal, Kayani tells Bloomberg
Pakistan and US officials are currently in discussions to finalize the finer details of a trade deal that includes investments after securing the lowest tariff among major South Asian nations, Bloomberg reported on Monday. Pakistan's revised tariff rate of 19% is lower than that of several regional economies, including India (25%), Bangladesh (20%), Vietnam (20%), and Sri Lanka (20%). Bilal Azhar Kayani told Bloomberg TV in an interview that Prime Minister Shehbaz Sharif's government aims to secure a better tariff on certain exports during the ongoing talks with the US. 'The agreement with more details will be negotiated and discussed in the months ahead,' Kayani said. The South Asian nation reached a trade deal last month with a 19% tariff – significantly lower than the initially proposed 29%, under a sweeping new executive order signed by President Donald Trump. The two nations have seen an improvement in relations recently with Trump also hosting Pakistan's Chief of Army Staff (COAS) Asim Munir for rare talks at the White House, who is on a second trip to the US within a few months. President Donald Trump, while announcing the trade deal, said the US will work with Pakistan on developing 'their massive oil reserves' and its in the process of choosing an oil company to lead the partnership. The news of the deal came on the same day that Trump launched an unprecedented tariff attack against India - threatening tariffs of 25% - which were later increased to 50% - among the highest on any US trading partner, unless India stops buying Russian oil and weapons. In India, Trump's tariffs spark calls to boycott American goods Trump has threatened higher tariffs on Russia and secondary sanctions on its allies, if Russian President Vladimir Putin does not move to end the war in Ukraine, and threatened to sanction both Russia and its allies. He even expressed dissatisfaction with India's participation in the 'anti-US' BRICS grouping. Their relations worsened as an Indian government source said Indian Prime Minister Narendra Modi would visit China for the first time in over seven years later this month. During the announcement of oil reserves, Trump added how Pakistan 'may be selling oil to India one day.'
