SYDNEY, May 3 (Reuters) - The Australian dollar was steady against its U.S. counterpart during a quiet session on Monday, shrugging off strong domestic jobs data as traders were cautious ahead of central bank meetings this week, while the kiwi dollar also held its own.
The Aussie was unchanged at $0.7713, after gaining 1.5% last month thanks to strength in iron ore and other commodity prices.
“The A$ remains undervalued given the continued surge in metals,” Westpac said. “We see this as temporary and just a matter of time before it gives way opening a move to 0.80 and beyond.”
The New Zealand dollar was also just 0.05% higher at $0.7163, taking a respite after rising 2.5% in April.
The kiwi has support around $0.7150, which traders say could be tested given the potential for the U.S. currency to attract more bids this week, as the world’s biggest economy releases big-ticket manufacturing surveys and April labour market numbers.
On the day, the dollar was clinging to a recent bounce as investors made a cautious start to the week and were looking for clues on the outlook for global inflation, and for policymakers’ response.
Federal Reserve Chair Jerome Powell is due to speak later on Monday and will be followed by a raft of Fed officials this week. Central bank policy meetings are also scheduled this week in Australia, Britain and Norway.
In Australia, data on Monday showed nationwide home prices posted another solid increase in April, while job advertisements climbed to their highest level since 2008 and up almost 200% on a year earlier when a pandemic lockdown shut many industries.
Investors expect the Reserve Bank of Australia (RBA) on Tuesday will maintain its ultra supportive policy settings at its monthly rate-setting meeting.
Traders will also look to a speech by deputy RBA Australia governor Guy Debelle on Thursday for insight into the bank’s thinking around its bond purchases outlook.
Australian government yields on 10-year bonds were little changed at 1.70%, and bond futures of the same maturity were 1 tick lower at 98.29.
Yields on New Zealand government bonds were 2 basis points higher at 1.70%.
Editing by Shri Navaratnam
Source: Reuters