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SYDNEY, Sept 15 (Reuters) – The Australian dollar came under pressure on Tuesday as odds narrowed for further monetary policy relieving by the nation’s central bank while its New Zealand peer held consistent.
The Aussie was last a shade weaker at $0.7285 The currency has meandered since striking a two-year high of $0.7413 on Sept. 1 as market prices shifted rapidly for a cut to the cash rate to 0.1%.
Interest rate futures are almost fully pricing in a 15 basis point rate cut at the Reserve Bank of Australia’s (RBA) Oct. 6 policy meeting.
The RBA last cut the cash rate to a lowest level of 0.25%in an emergency situation conference in March and has consistently stated the benefits of taking rates deeper into record area were limited.
However at its September board meeting, Governor Philip Lowe hinted at extra policy measures to support an economy reeling from its worst contraction in nearly a century.
The remark stired speculation of more alleviating.
The marketplace is now awaiting minutes of the RBA’s Sept. 1 policy conference due out at 0130 GMT for clues about its future strategy.
” The RBA Minutes … might show conversation on any further tweaks to policy the RBA is considering,” NAB senior Forex (Click Here For Best Forex Techniques) strategist Rodrigo Catril wrote in a note.
Catril referred to a news story in the Australian Financial Evaluation on the weekend saying the RBA was pondering more policy easing, including an expanded bond purchasing program and perhaps reducing the cash rate.
” This saw selling pressure on the AUD and gains in the NZD, suggesting closing of long AUD/NZD positions may have been a factor,” Catril stated.
Versus the New Zealand dollar, the Aussie slipped to a one-week low overnight to $1.0854 It pared some of the losses to be last at $1.0871
The New Zealand dollar was bring $0.6699, above a recent trough of $0.6602, partially on news the nation would raise coronavirus limitations throughout the nation on Sept. 21.
” NZD’s outperformance can probably be partially attributed to news that the NZ Government is looking at alleviating virus restrictions, although we presume the AUD/NZD underperformance played a bigger role on the flying kiwi amidst selling pressures on the cross,” Catril said.
New Zealand federal government bonds were slightly weaker with yields up about 1 basis point at the long end of the curve.
Australian federal government bond futures were little bit changed, with the three-year bond agreement at 99.734 and the 10- year agreement at 99.116 (Modifying by Shri Navaratnam)
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