SYDNEY – The Australian and New Zealand dollars were perched near multi-week highs on Aug 18 as the greenback eased broadly despite a spike in Treasury yields, rekindling talk of diversification from the US currency.
The Aussie was up at US$0.7111, after rising 0.3 per cent overnight to reach a 10-week top at US$0.7129. The break of US$0.7088 resistance was bullish for a push to US$0.7200 and the May peak of US$0.7277.
It also drew demand against the yen, climbing to 113.27 and extending the recovery from a 109.19 low hit after Japan and the United States intervened in late July.
The kiwi dollar stood at US$0.5904, after also touching a 10-week high at US$0.5926 overnight. The next barrier is a double top around US$0.5993, with support at US$0.5821 and US$0.5762.
Tim Baker, a macro strategist at Deutsche Bank, noted some recent pieces of US economic data had missed forecasts, while the news had improved in other developed nations.
“It’s denting the US growth exceptionalism picture,” Baker said in a note. “It’s not to say the US is in a bad place at all, just to remind that the dollar tends to lag when growth is looking solid elsewhere in the world.”
A survey out on Aug 18 showed sentiment among Australian consumers improved markedly in August after the Reserve Bank of Australia held interest rates at 4.35 per cent, following three hikes earlier in the year.
Data on jobs is due on Aug 20 and forecast to show a gain of 15,000 in July, on top of June’s bumper 76,300 increase.
The unemployment rate is seen holding at 4.4 per cent, barely changed from where it was a year earlier.
A sell-off in Treasuries did push Australian 10-year yields up to 5.047 per cent, a rise of 6 basis points in two sessions, leaving the spread over US debt little changed at 32 basis points.
The Australian government is selling a new 2038 bond on Aug 18 that is expected to draw strong investor demand.
Tech giant Alphabet is also looking to sell paper in its first Australian deal, which could be the largest corporate issue ever for the country. Reuters
