1. Australia, New Zealand dollars near multi-month lows on USD, Euro and Pound

Australia, New Zealand dollars near multi-month lows on USD, Euro and Pound

The Australian and New Zealand dollars hovered near multi-month lows against the U.S. dollar, euro and pound on Monday as lingering uncertainty about U.S. trade policies sapped appetite for commodity currencies.

By: | Updated: May 1, 2017 9:33 AM
The Australian dollar eased to USD 0.7477, from USD 0.7490 on Friday, having touched USD 0.7440 last week, its lowest since mid-January.

The Australian and New Zealand dollars hovered near multi-month lows against the U.S. dollar, euro and pound on Monday as lingering uncertainty about U.S. trade policies sapped appetite for commodity currencies.

The Australian dollar eased to $0.7477, from $0.7490 on Friday, having touched $0.7440 last week, its lowest since mid-January. It posted a loss of 1.8 percent in April, the largest monthly loss this year.

Traders see possible further downside due to crowded one-way bets.

“The bulls are still holding longs. A clean break of $0.7400 may cause traders to bail,” said Stephen Innes, a senior trader at OANDA.

Data from the Commodity Futures Trading Commission showed speculators are net long 42,702,

The Antipodean currencies were also near multi-month lows against the euro and pound.

The euro trimmed some of its stellar gains made last week at A$1.4562 when it climbed to the highest this year at A$1.4650. It gained around 4 percent in April, the largest such increase in two years.

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Likewise, the common currency hovered at NZ$1.5872 against the New Zealand dollar, having powered up to NZ$1.5939, the highest level since June last year. It rose 4 percent last week, the biggest such gain in nearly a year.

The Antipodean currencies were nursing heavy losses against the pound which jumped around 5 percent in April against both the Aussie and Kiwi.

Data in Australia showed a sharp slowdown in home prices, which should help ease policymakers concern over the risks of a debt-fuelled real estate bubble.

The Reserve Bank of Australia (RBA) holds its monthly policy meeting on Tuesday and is considered certain to hold rates at a record low 1.5 percent following two cuts last year.

All 71 economists polled by Reuters forecast rates would be held steady and the majority predicted no change in the cash rate over the next 12 months.

The New Zealand dollar drifted lower to $0.6857, from $0.6870 late on Friday.

One possible bright spot for investors was first quarter labour data due out on Wednesday, which was expected to show strong job growth and unemployment remaining near eight-year lows.

New Zealand government bonds gained, sending yields 3.5 basis points lower at the long end of the curve.

Australian government bond futures were subdued, with the three-year bond contract steady at 98.170. The 10-year contract eased half a tick to 97.3900, while the 20-year contract shed two ticks to 96.8050.

(Editing by Simon Cameron-Moore)

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