US shares surge after PCE
Financial markets ended a positive week strongly on Friday with US shares surging after a weaker than expected PCE inflation reading.
The February personal consumption and expenditure release saw an annual headline number at 5.0% – down from 5.4% in the previous month – with the core number at 4.6%, down from 4.7%.
The news suggests that inflation pressures are easing in the US and means the Federal Reserve has less need to hike interest rates. The US’s S&P 500 gained 1.5% to close out a 3.4% gain for the week.
Aussie, kiwi ease from recent highs
The Australian dollar didn’t benefit, however, with the AUD/USD down 0.3%.
The AUD/USD has recently struggled at five-week highs with key resistance seen at 0.6750.
The NZD/USD is in a similar position, down 0.1% on Friday, with resistance seen at the six-week highs near 0.6300.
RBA, RBNZ critical
The Australian and New Zealand dollar will be tested this week by critical central bank decisions.
The Reserve Bank of Australia, due to meet on Tuesday, is seen as most likely to keep interest rates on hold – market pricing sees an 85% chance of no change (source: Refinitiv).
On the other hand, on Wednesday, the Reserve Bank of New Zealand is expected to raise rates to 25 basis points to 5.00% — the market ascribes a 92% chance for a hike.
However, any suggestion of a pause from the RBNZ might see the kiwi lower after the announcement.
Aussie, kiwi turn near highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 3 – 7 April
All times AEST
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