FOREX-Antipodean currencies leap on central bank talks, US dollar weak


* Dollar under pressure against safe haven currencies as yields decline

* ISM lower than expected, Delta variant feared to undermine risk appetite

* Aussie jumps after RBA sticks to bond cut plan

* Chart: Global exchange rates

By Ritvik Carvalho

LONDON, Aug. 3 (Reuters) – The New Zealand dollar and Australian dollar were the main gainers among major currencies on Tuesday, helped by speeches from their central banks, as the US dollar took precedence over the yen and the Swiss franc in a context of market risk aversion.

The Kiwi dollar rose 0.6% to $ 0.7007 – the biggest gainer among G10 currencies on the day – after New Zealand’s central bank said on Tuesday it would soon begin consulting on ways to tighten mortgage standards as she tries to control a bloated housing market and protect homebuyers.

The Australian dollar has soared after the Reserve Bank of Australia maintained its plan to cut its bond buying program, ignoring concerns about the economic impact of rising coronavirus cases. It gained half a percent to $ 0.7393 over its US counterpart.

The US dollar slipped 0.14% to 109.16 yen, close to its July 19 low of 109.07, which was its lowest level since late May. Against the Swiss franc, the dollar traded 0.3% to 0.9026 francs, after hitting a 1.5-month low at 0.9038 in the previous session.

The index which measures the strength of the dollar against a basket of peers was down 0.1% at 10:53 am GMT.

Market watchers recently indicated that the decline in US Treasury yields was indicative of fears of an upcoming disappointment in economic growth.

The 10-year U.S. Treasury yield fell on Monday shortly after an Institute for Supply Management (ISM) report showed U.S. manufacturing growth in July slowed for the second month in a row.

“We saw demand for high yielding currencies return after the disappointing July ISM manufacturing ISM apparently caused the patient Fed to wait longer before embarking on political normalization and thus weighed on the USD, yields UST and US rates, “said Valentin Marinov, head of G10 FX research at Crédit Agricole.

“That being said, I suspect that currency investors will continue to position themselves for the phasing out of accommodation from Fed policy and the next big event on the calendar will be the Jackson Hole Central Bank Symposium from 26 to August 28, which has served as a venue for important Fed policy announcements in the past. “

Marinov said some clients believed Federal Reserve Chairman Jerome Powell could provide more details on the timing and scope of the QE cut at the meeting.

The euro was a little higher at $ 1.1887, after losing some momentum after hitting a one-month high of $ 1.1909 on Friday. The British pound gained 0.3% to $ 1.3931, just after Friday’s one-month high of $ 1.39835.

The spread of the COVID-19 Delta variant further clouded the outlook for the dollar. In the United States, COVID-19 hospital admissions in Louisiana and Florida have reached a new high, although top U.S. health expert Anthony Fauci has ruled out another lockdown in the country.

This outweighed any excitement over a $ 1 trillion infrastructure investment bill that could be ready for a final vote as early as this week.

Japan extended the state of emergency to other regions on Monday as cases hit a record high in Tokyo. In China, the spread of the Delta variant poses new risks for the world’s second-largest economy.

(Additional reporting by Hideyuki Sano in Tokyo, edited by Timothy Heritage)

Leave A Reply

Your email address will not be published.