SYDNEY, Sept 11 (Reuters) – The Australian and New
Zealand dollars found some support on Monday after plumbing
10-month lows, but risk sentiment remained fragile as traders
braced for a key U.S. inflation report and more Chinese economic
data later in the week.
The Aussie rose 0.3% to $0.6397, benefiting from a
jump in the yen in early Asia trade that weighed on the U.S.
dollar. It was, however, unable to break a major resistance
level of 64 cents, while support lies at the 10-month low of
$0.6358 it hit last week.
The kiwi also edged 0.3% higher to $0.5901, having
also touched a 10-month trough of $0.5860 last week. Resistance
levels are plentiful but it also has support at $0.5800.
Bank of Japan Governor Kazuo Ueda has signalled the
possibility of ending negative rates, saying that the bank could
have enough data by year-end to determine whether it can do
that, according to a local media report on Saturday.
The yen jumped 0.6% and longer-dated Japanese
government bond yields hit 2014 highs. Australian 10-year
benchmark yields also rose 5 basis points to 4.141%.
Data over the weekend that showed China’s consumer prices
returned to expansionary territory in August, easing fears about
the health of the world’s second-largest economy – a positive
for the Aussie.
Jonathan Petersen, senior market economist at Capital
Economics, expects the rally in the U.S. dollar could lose some
steam this week as U.S. consumer inflation eases, Chinese
activity data show signs of stabilising and European Central
Bank presses ahead with one final hike on Thursday.
“That said, the overall backdrop suggests to us the
greenback will strengthen further over the next couple of
quarters,” said Petersen.
In the week ahead, Australia will report jobs data for
August on Thursday. The economy is expected to have added 23,000
new jobs, more than compensating for a surprise fall of 14,600
jobs in the previous month, while the unemployment rate likely
ticked lower to 3.6%, from 3.7%.
The strength of the labour market is one reason that a
majority of economists polled by Reuters still expect the
Reserve Bank of Australia to hike one more time by year-end, but
markets suspect the tightening cycle could well be over.
(Reporting by Stella Qiu; Editing by Christopher Cushing)
