Australia, NZ dlrs Suffer Sharp Reversal, Global Mood Swings


SYDNEY, Jan 28 Reuters The Australian and New Zealand dollars were in retreat on Thursday as a sharp reversal in global risk sentiment wrongfooted speculators and triggered a wave of stoploss sales.

The sudden change of mood saw the Aussie down 0.4 at 0.7628, snapping major chart support at 0.7640 and hitting its lowest since late December.

That was a marked turnaround from early Wednesday when it had been testing resistance around 0.7765, and risked a pullback toward 0.7550.

The kiwi dollar slid to 0.7139, having shed 1.1 overnight from a top of 0.7245. That took it uncomfortably close to the January low at 0.7097, a breach of which would risk a return to 0.7000.

Concerns about delays in the global rollout of coronavirus vaccines has clouded the outlook for commodity demand and prices, as had a tightening in Chinese money markets this week.

Chinas central bank had surprised by draining money from the banking system and nudging market interest rates higher, a possible threat to the countrys demand for resources.

Joseph Capurso, a strategist at CBA noted there were also reports that Beijing wanted Chinese steelmakers to reduce production and lessen their reliance on Australian iron ore.

The Asian giant currently takes over 80 of Australias iron ore exports, which are also its single biggest export earner.

Figures out Thursday showed prices for iron ore exports jumped by almost 12 over the December quarter, delivering a big boost to mining profits and government…


Please enter your comment!
Please enter your name here