Aussie, kiwi under pressure vs. stronger greenback as caution dominates
Investing.com – The Australian and New Zealand dollars were both hovering at one-month lows against their U.S. counterpart on Thursday, after the Reserve Bank of New Zealand left interest rates unchanged and as demand for the greenback remained broadly supported.
was little changed at 0.7818, the lowest since January 10.
The greenback was mostly underpinned by higher U.S. bond yields, with the yield on benchmark close to recent four-year highs on Thursday.
But the dollar’s gains were capped by sustained concerns over recent volatility on global stock markets. Equities wordlwide after a strong U.S. jobs report sparked concerns over rising inflation.
Markets began to stabilize on Wednesday but traders were still cautious as high bond yields could cause them to plunge again.
dropped 0.54% to trade at 0.7201, also the lowest since January 10.
Earlier Thursday, the RBNZ left its benchmark interest rate unchanged at , in a widely expected decision.
Commenting on the decision, RBNZ Assistant Governor John McDermott : “There is a significant probability that the next rate move could be an increase sometime in the future, and there’s also a substantial probability that the next move could actually be a cut.”
“If we saw big moves in inflation expectations, the market should expect the bank to act,” he added.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 90.14 by 02:10 a.m. ET (06:10 GMT), just off a more than two-week peak of 90.27 hit overnight.
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