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Australia, NZ Dollars Find Footing on Path out of Lockdowns

SYDNEY, Sept 9 (Reuters) - The Australian and New Zealand dollars found some kind of footing on Thursday after three days of losses as signs of progress with opening up their economies from coronavirus lockdowns offset global risk aversion.

The Aussie was hanging on at $0.7354, after finding support at $0.7345, but remained well short of the recent top at $0.7478. Technically, it needs to hold above major support around $0.7290 for a chance to resume its rally.

The kiwi dollar was also steadier at $0.7088, having found support at $0.7076. That was some way from the recent three-month top of $0.7170 but well above the August trough at $0.6810.

There was hopeful news on the pandemic front with New South Wales planning to partially reopen its economy when 70% of adults are fully vaccinated which is likely around mid-October or even earlier.

A loosening is sorely needed as payrolls data out on Thursday showed a sharp drop in jobs in the first half of August.

Jobs in NSW have now fallen by 8.4% since the lockdown began on June 26, a decline that is finally expected to show in the official August labour report out next week.

“We expect a massive 300,000 decline in employment, driven almost entirely by NSW,” said CBA economist Stephen Wu.

“As the Victorian lockdown started later, the majority of that hit to employment will show up in the September survey instead.”

New Zealand has already eased restrictions in most of the country, though the city of Auckland remains locked down.

Prime Minister Jacinda Ardern on Thursday announced the purchase of 250,000 doses of the Pfizer vaccine from Spain to help sustain a faster rollout in the country.

The progress has encouraged investors to price in almost a 100% chance of a quarter-point rate hike from the Reserve Bank of New Zealand next month and a further increase in November.

Yields on 10-year bonds have climbed to their highest since February at 1.968%, putting them an ample 66 basis points above U.S. yields.

Comparable Australian bonds pay only 1.266%, 8 basis points less than Treasuries.

Editing by Sam Holmes

Source: Reuters

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