SYDNEY, April 6 (Reuters) - The Australian and New Zealand dollars found support on Tuesday from more evidence of strong economic growth in China and the United States, and as Australia’s central bank sounded upbeat on the domestic outlook.
The Aussie held at $0.7640 and well above last week’s three-month low of $0.7533. Bulls need to crack resistance at $0.7664 to keep the rally going, while the major target for bears is the 200-day moving average down at $0.7396.
The kiwi dollar stood at $0.7050 and off its recent four-month trough at $0.6944. Resistance lies around $0.7095/7100 ahead of $0.7135/50, which is where the currency was trading before a sharp retreat in mid-March.
Sentiment was helped by surveys of service sector activity from China and the U.S, which easily beat forecasts.
There was also good news on the hard-hit tourist sector with Australia and New Zealand agreeing on a travel bubble.
Wrapping up its April Board meeting, the Reserve Bank of Australia (RBA) kept rates at 0.1%, as expected, and again emphasised that no hike was likely until 2024 at the earliest.
It was also optimistic on the outlook, noting the economy had recovered far faster than expected with employment reaching pre-pandemic levels in February.
Figures out Tuesday showed labour demand remained strong with job advertisements jumping to a 12-year high in March.
The RBA sounded a little more concerned about surging house prices, cautioning banks that it did not want to see a loosening in lending standards.
Any action is likely to come through macro prudential rules, with the RBA committed to keeping rates at record lows until wage growth and inflation pick up decisively.
“Despite the improvement in the labour market the bank is not satisfied,” said Ben Udy, Australia economist at Capital Economics.
“With the second round of bond purchases announced in February set to have run its course by the end of August, we still expect the Bank to unveil a third round of QE in June bringing total purchases to A$300 billion.”
Three-year yields were down at 0.11%, and near the RBA’s target of 0.1%, as the market waits to see if the central bank will switch from the current April bond line to the November bond.
Australian 10-year bond yields eased to 1.717%, from a top of 1.83% last week, well within the 1.65/1.87% range that has held for the past month or more.
(Editing by Amy Caren Daniel)
Source: Reuters