The Australian dollar stayed on the defensive on Tuesday as investors weighed the risk of further policy easing, including unconventional stimulus steps, while the New Zealand dollar drew support from upbeat local data.
The Aussie was stuck at $0.6776 having come within a whisker of breaching major support at the November low of $0.6770.
The kiwi dollar again outperformed by holding at $0.6417, having found solid support at $0.6395. The kiwi got a boost from data showing retail sales volumes surged a surprisingly strong 1.6% in the third quarter, thanks in part to spending on electronic gadgets.
Such a turn could lessen the need for another cut in interest rates from the Reserve Bank of New Zealand (RBNZ), with market now implying only a 26% chance of a move at the next policy meeting on Feb. 12.
The risk was underlined by RBA Deputy Governor Guy Debelle on Tuesday, who warned that wage growth had become entrenched in a low 2-3% range and unemployment would need to fall further to get it up.
Investors are wagering it will take further stimulus to achieve this goal and are fully priced for a rate cut to 0.5% by the middle of next year.
15 Jan 2021 06:13 PM
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Indian shares plummeted the most in nearly four weeks today, ending down over 1%, as investors locked in profits following the benchmark indexes hitting multiple record highs this week and as a proposed U.S. stimulus package failed to surprise.
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15 Jan 2021 01:50 PM
Pound bounced of daily lows following the release of UK growth numbers.
15 Jan 2021 12:50 PM
Yen stabilized around 104.00 after a good two-way price swings yesterday.