SYDNEY, Aug 11 (Reuters) – The Australian and New Zealand dollars were cooling their heels on Tuesday as the deadlock on U.S. fiscal stimulus restrained risk assets, while data underlined the economic damage being done by the new lockdown in Victoria state.
The Aussie stood at $0.7170, after a pullback form the recent 18-month peak at $0.7242 found support around $0.7140. More support comes in at $0.7070/80 with immediate resistance at $0.7184.
The kiwi dollar was holding at $0.6610, just above important support at $0.6575 and short of the recent top of $0.6716.
Both currencies have edged back as the U.S. dollar benefited from a squeeze on crowded short positions after weeks of losses.
The Aussie also had domestic troubles as a fresh coronavirus lockdown in Melbourne, the capital of Victoria, hurt business and consumer sentiment.
The NAB business survey out Tuesday showed confidence took a turn for the worse in July even as conditions improved outside of Victoria.
A weekly survey of consumer confidence from ANZ showed sentiment had slipped for a seventh straight week, while spending on ANZ cards weakened in Victoria.
Figures on weekly payrolls showed job gains had stalled late in July, something that will not be fully reflected in the official jobs report on Thursday. “The July labour force figures will receive plenty of coverage, but our advice is to see the report for what it is – a dated read on the labour market that has not picked up any job losses associated with the second lockdown in Victoria,” CBA senior economist Gareth Aird said.
New Zealand, in contrast, has gone weeks without a new coronavirus case and its economy has improved markedly. That has lessened pressure on the Reserve Bank of New Zealand (RBNZ) to cut rates further at its policy meeting on Wednesday.
Analysts do suspect the bank might announce an increase to its bond buying programme and extend its end-by date.
“The question on the minds of currency market participants is will the RBNZ attempt to make a play at lowering the NZD,” said Hamish Wilkinson, a senior dealer at Kiwibank.
“This could be observed through either continued jawboning or even confirmation that RBNZ will expand the unconventional policy tool kit to include foreign asset purchases,” he added.
“Dependent on what the RBNZ delivers, NZD should see a good chance of a breakout of our current $0.6600 – $0.6750 range.” (Editing by Himani Sarkar)
Source: Read Full Article