(Reuters SYDNEY) The Australian and New Zealand dollars were stuck in a rut against their US counterpart on Tuesday, but stood near multi-month highs on the Japanese yen as traders remained focused on divergent monetary policy globally.
The Australian dollar held at US$0.7602, well off the recent high of US$0.7712. The Aussie had barely moved on Monday, ending that session at US$0.7607.
“After nearly a decade of loose monetary policy, global central banks are looking to turn down the music at the global bond party that has raged on well past its expected shelf life,” said Stephen Innes, senior trader at Oanda.
“Despite this growing sense of reality setting in, traders remain tied up in knots fearing inflationary data surprises.”
Trading volumes were below June’s average daily turnover as traders awaited comments from Federal Reserve Chair Janet Yellen for fresh cues on policy direction. The Bank of Canada is due to meet on Wednesday when it is expected to hike interest rates for the first time in almost seven years.
“Perhaps the tepid volumes are reflecting reduced summer positioning, a lack of interest or a bit of both. However, that tune will change as we move deeper into a potentially dangerous trading week,” Mr Innes added.
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