Stocks In Focus:Australia and NZ Dollars Rebound But Gains Seen Limited To Short Term

Must Read

The Australian and New Zealand dollars experienced a rebound on Monday as investors sought to diversify their portfolios away from the safe-haven US dollar.

This came from a week packed with central bank meetings, which has set the cautious tone for trading for the remainder of the year. With global economies still struggling under the weight of Covid-19, many investors are taking a wait-and-see approach to invest, seeking out safer currencies such as the US dollar to protect against volatility in other markets.

The Australian dollar rose 0.4% to $0.6716 after experiencing its biggest slump since mid-October, with a 1.6% drop last week.

The New Zealand dollar gained 0.1% to $0.6385 and fell 0.5% last week. This marks a slight recovery for the currency, which is still down nearly 3% from last year as Covid-19 continues to impact global markets and economies.

Despite the gains, the Kiwi Dollar remains between 63 cents and 64 cents against its US counterpart and is not too far away from its six-month high of $0.6513 last week. A break above this level could provide a much-needed boost to the currency. Still, it will likely face resistance at 64 cents due to ongoing economic uncertainty caused by the pandemic.

“We continue to think that the conditions for a sustained drop in the dollar are not in place, and we expect a further leg up in the dollar in the first part of 2023,” said Goltermann.

Since late September, the correction of almost 10% in the dollar index may be nearing its end, given central banks’ hawkish attitude on interest rates.
Following a series of central bank meetings that painted a cautious outlook for global economies, investors are increasingly opting for less risky currencies such as the US dollar. This has caused both the Australian and New Zealand dollars to experience declines in value over this month.

- Advertisement -spot_img
- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img