SYDNEY, July 31 (Reuters) – The Australian dollar steadied near a two-year peak on Monday, on track for its best monthly performance since January, while its New Zealand counterpart was set for a third straight month of gains.
The Australian dollar stood at $0.7982, not far from $0.8066 touched on Thursday – its highest since May 2015. The Aussie climbed about 0.9 percent last week and has added 3.8 percent this month so far.
Underpinning sentiment were solid data on the Chinese economy and an 8 percent jump in futures for iron ore, Australia‘s single biggest export earner.
The currency’s uphill trek was partly interrupted by the Reserve Bank of Australia(RBA), which last week emphasised the need for policy rates to stay at record lows.
The RBA will hold its monthly policy meeting on Tuesday, at which it is widely expected to keep rates at 1.50 percent after last easing a year ago.
“The Aussie moves have been nothing short of incredible, but we should be in for a well overdue consolidation phase,” said Stephen Innes, head of trading APAC at OANDA.
At 80 U.S. cents, the Australian dollar “is looking very expensive especially in the wake of Governor Philip Lowe‘s speech which cut short any domestic rate hike expectation,” Innes said.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.