Australia, New Zealand dollars hold gains, market pushes out RBA easing

Australia, New Zealand dollars hold gains, market pushes out RBA easing

21 Oct 2019 12:11 PM
 

The Australian and New Zealand dollars held near five-week highs on Monday as their U.S. counterpart struggled with expectations of an impending rate cut, while policy in Australia is seen on hold for at least another month.

The Aussie edged up to $0.6857 and further way from last week's low at $0.6724. The next major chart target is a top from September at $0.6895. The kiwi dollar reached $0.6396, up from a trough of $0.6241 last week. It also has a September peak to aim for at $0.6450.

Investors are wagering heavily the U.S. Federal Reserve will cut rates again at its Oct. 30 policy meeting, with futures implying an 88% chance of a move.

In contrast, the market has scaled back bets for an easing from the Reserve Bank of Australia (RBA) at its next meeting on Nov. 5 following data showing an unexpected dip in the jobless rate to 5.2%.

The Reserve Bank of New Zealand (RBNZ) may not wait so long, with the market pricing in around a 87% chance of a quarter-point cut to 0.75% at its Nov. 13 policy meeting.

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