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.
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Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.