Economic news

Australian Dollar near 2-1/2-Year Top; NZ$ Stumbles

SYDNEY, Dec 10 (Reuters) - The Australian dollar stayed near a 2-1/2-year peak on Thursday on strong iron ore prices though overall sentiment was dampened by elevated risks surrounding Brexit trade talks and ongoing political wrangling over U.S. stimulus package.

The Australian dollar was trapped in a narrow range to be last at $0.7458 after going as high as $0.7485 on Wednesday.

The Aussie is up more than 4% so far this year led by its relative success in curbing the coronavirus pandemic, stronger-than-expected macroeconomic data recently and sturdy gains in the price for iron ore - its No.1 export earner.

“If you are trading commodities from the iron ores bullish side, you need to like the Aussie, which is firing on all cylinders these days,” Stephen Innes, chief strategist at axi.

Dalian iron ore hit a record high last week, boosted by top consumer China’s robust demand for the steelmaking ingredient and supply concerns.

The Aussie’s rise was, however, capped by disappointing news from overseas with a lack of progress in U.S. fiscal stimulus and Brexit trade negotiations.

In the United States, Congress continued talks on additional economic stimulus, with House lawmakers voting to pass a one-week stopgap funding bill to give more time for talks.

Meanwhile, British Prime Minister Boris Johnson warned the European Union on Wednesday it must scrap demands that he says are unacceptable if there is to be a Brexit trade deal to avoid a turbulent breakup in three weeks.

The New Zealand dollar was quoted at $0.7021 after hitting a 2018 high of $0.7124 last week.

Domestic data was less supportive too with electronic card retail sales rising a mere 0.1% in November, suggesting policy will have to remain accommodative to fuel consumer spending.

New Zealand government bonds rose, sending yields about 3 basis points lower at the long-end of the curve.

Australian government bond futures jumped, with the three-year bond contract up 12 ticks at a one-week high of 99.826. The 10-year contract rose 3 ticks to 99.009.

Australian government debt is in great demand. On Thursday, the country sold A$550 million ($409.7 million) 2021 debt at minus 0.01%, joining a raft of developed countries whose debt offers negative yields.

(Editing by Sam Holmes)

Source: Reuters


To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree