SYDNEY, Nov 26 Reuters The Australian and New Zealand dollars paused to digest recent meaty gains on Thursday as a U.S. holiday thinned liquidity, though the prospect of a vaccineled global recovery kept commodity prices and risk assets well underpinned.
The Aussie held at 0.7369, having risen 4.9 for November so far to reach a threemonth top of 0.7373. Bulls were now preparing for a test of the September peak at 0.7413, a break of which would take it to ground not trod since August 2018.
The kiwi dollar was enjoying the view at 0.7006 having already reached its highest since June 2018. The next major target is 0.7060, though the currency is vulnerable to profit taking given it has surged almost 6 so far this month.
That jump was driven partly by weakness in the safehaven U.S. dollar but also by surprising strength in the domestic economy and a boom in house prices which led the market to scale back expectations of further policy easing.
The countrys government added fuel to the fire this week by asking the Reserve Bank of New Zealand RBNZ to consider the need to contain house prices when setting rates OCR.
That might make the RBNZ less gungho about lowering interest rates in the near term, Dominick Stephens, Westpac chief economist for New Zealand.
We were forecasting OCR cuts in April, May and August, but that timing now looks less likely. We are reviewing our OCR forecasts and will update them in due course.
The swaps market is now pricing in only 10 basis…