Australian dollar steadies, markets await jobs data for steer on rates
By Wayne Cole SYDNEY, Oct 14 (Reuters) — The Australian and New Zealand dollars looked a little steadier on Wednesday as the greenback's bull run took a breather, though both were still uncomfortably close to major support levels. The Aussie was a fraction firmer at $0.6987, having bounced almost 0.4% overnight. A break of resistance at $0.6995 would open the way for a move to $0.7045, while support lies at $0.6933 and $0.6904. The kiwi dollar stood at $0.5615, after rising 0.5% overnight and away from a 17-month trough of $0.55805. Resistance is layered between $0.5626, $0.5650 and $0.5687, suggesting a further recovery will be hard going. Markets were still digesting minutes of the Reserve Bank of Australia's last policy meeting which sounded more hawkish than the media conference given by governor Michele Bullock after the decision to raise rates by a quarter point to 4.6%. Of note was multiple references by board members to the Aussie and the risk that it could weaken if central banks abroad kept raising rates while the RBA stood still. The Aussie is a major transmission mechanism for monetary policy and any weakening in the currency would tend to loosen financial conditions at
By Wayne Cole SYDNEY, Oct 14 (Reuters) — The Australian and New Zealand dollars looked a little steadier on Wednesday as the greenback's bull run took a breather, though both were still uncomfortably close to major support levels. 4% overnight. 6904. 55805.
5687, suggesting a further recovery will be hard going. 6%. Of note was multiple references by board members to the Aussie and the risk that it could weaken if central banks abroad kept raising rates while the RBA stood still. The Aussie is a major transmission mechanism for monetary policy and any weakening in the currency would tend to loosen financial conditions at home while adding to imported inflation.
"This suggests greater sensitivity to rate hikes elsewhere than we had thought," said Andrew Ticehurst, an economist at Nomura. 85% when it meets on November 3, while a move in December is put at 50%. The calculation could change with the September jobs report due on Thursday, where forecasts are for a rise of 20,000 following a surprisingly strong 39,500 gain in August. 6% in August.
7% would strengthen the case against a rate rise in November. Analysts also note the jobless rate has had a habit of popping higher in recent months, only to fall back again the following month, an outcome that would tend to pressure the Aussie. net/)