Australia, NZ Dollars Defensive as Markets Reject Rate Cuts‍

In Sydney, by the end of the week, the Australian and New Zealand dollars found themselves in a defensive position due to positive economic data boosting the US dollar. Additionally, domestic debt markets increased the likelihood of delaying rate cuts.

The Australian dollar depreciated to $0.6596, unable to sustain the crucial $0.6650 level on the chart. This decline resulted in a 1.3% decrease for the week, significantly below the recent peak of $0.6714 reached four months ago. Current support is anticipated within the range of $0.6560 to $0.6580. Meanwhile, the New Zealand dollar remained steady at $0.6095, registering a 0.6% decline for the week and falling from its two-month high of $0.6152. Support levels are identified at $0.6084 and $0.6041.

A hawkish shift in the Reserve Bank of New Zealand's (RBNZ) perspective has provided support to the kiwi, prompting a significant revision in market expectations regarding rate cuts. Expectations for an October easing have plummeted from 84% earlier in the week to only 28%. Moreover, the probability of a rate cut, currently at 5.5%, is now not fully anticipated until April next year.

Source: brecorder