Australian dlr near 6-wk peak as RBA holds rates, NZ$ at 1-mth highs

By Swati Pandey and Charlotte Greenfield

SYDNEY/WELLINGTON, June 5 (Reuters) – The Australian dollar hovered near six-week highs as the country’s central bank sounded upbeat about future economic growth, while the New Zealand currency held near a one-month peak.

The Australian dollar AUD=D4 was last at $0.7633, down 0.2 percent on the day and within striking distance of Monday’s $0.7665, a level not seen since April 23.

The New Zealand dollar was barely changed at $0.7029, a touch below the one-month peak of $0.7048 hit overnight.

Earlier, the Reserve Bank of Australia (RBA) held interest rates at 1.50 percent for a 22nd straight meeting, citing lukewarm inflation and wage growth.

However, it said the country’s gross domestic product (GDP) growth was expected to accelerate to “a bit above” 3 percent in 2018 and 2019. upbeat outlook came as analysts upgraded forecasts for first-quarter GDP, due Wednesday, following a run of better-than-expected data this week.

Australia’s A$1.8 trillion economy is expected to have expanded a brisk 0.9 percent in the March quarter from 0.4 percent in December, according to a consensus of 19 economists polled by Reuters.

The annual pace likely accelerated to a healthy 2.8 percent, from 2.4 percent in December.

Before this week’s data, economists had expected growth of 0.8 percent for the quarter and 2.7 percent for the year.

However, there was caution around reading too much into the quarterly numbers.

“While recent data does point to an acceleration in March quarter GDP growth, there have been numerous growth spikes in Australia to around 1 percent, quarter on quarter, in recent years only to be followed by a cooling again,” said Shane Oliver, chief economist at AMP.

“And, the RBA is no doubt aware of this tendency for the economy to run hot and cold, he said.

“Uncertainty remains around the outlook for consumer spending — household debt is high, banks are tightening lending standards, wage growth and inflation remain low and will pick up only gradually and house prices are falling,” Oliver added.

In New Zealand, the next major local event was a dairy auction due to take place overnight, which could see prices rise on sluggish global supply.

New Zealand government bonds 0#NZTSY= eased, sending yields 8 basis points higher towards the long end of the curve.

Australian government bond futures were mixed, with the three-year bond contract YTTc1 up 1 tick at 97.805. The 10-year contract YTCc1 was flat at 97.265.

Disclaimer:
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.