Aussie, kiwi maintain ranges
The Australian and New Zealand dollars kept to confined ranges and were little changed against their U.S. counterpart. The U.S. dollar has struggled of late as signs of slower American hiring suggested the Federal Reserve may be close to the end of its inflation-subduing rate hiking cycle.
Still, gains for the Antipodean currencies were held in check by worries about China’s lackluster recovery from the pandemic. Data to start the week showed that consumer inflation in the world’s second-biggest economy flatlined with a zero reading in June, the slowest annual rate since 2021.
Elsewhere, U.S consumer inflation, due Wednesday, may shed important light on the outlook for Fed policy and the greenback.
Aussie steadies as weaker USD offsets China worries
The Aussie dollar kept to a tight range against the U.S. dollar with the pair little changed so far in July. Greenback softness should support the Aussie, but gains are proving tough to sustain amid ongoing worries about China’s disappointing recovery from the pandemic.
A light week for Australia’s economy features a report today on business confidence. Business optimism has languished, partly due to the Reserve Bank of Australia’s aggressive rate increases that have boosted lending rates to 4.1%, the highest level in 11 years.
AUD/USD weakened about 0.2% in overnight trading.
Kiwi mostly flat ahead of RBNZ decision
New Zealand’s kiwi dollar was barely changed with many sitting along the sidelines ahead of today’s interest rate announcement by the Reserve Bank. The RBNZ is forecast to keep rates at 5.50%. Like the Aussie, the kiwi has been weighed down by worries about China’s economic health as both countries rely on Chinese demand for their resource exports.
Key for the NZD will be whether New Zealand’s central bank comes across more hawkish or dovish.
NZD/USD enjoyed a modest gain of around 0.1% during the overnight session.
USD builds on recent slide
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 10 – 15 July
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
