SYDNEY, March 10 Reuters The Australian dollar was fighting to keep a rally alive on Wednesday after a top central banker bluntly rebuffed market chatter about early rate increases, helping pull local yields lower.
The Aussie faded to 0.7684, having just survived another brush with support around 0.7620 overnight. It needs to clear 0.7727 resistance to find firmer footing, while a break of the February low at 0.7565 would signal a deeper correction.
The New Zealand dollar dipped to 0.7150, and looked in danger of again testing support at 0.7105. Resistance lies at 0.7195, with more up at 0.7270.
The Aussie took a knock when Reserve Bank of Australia RBA Governor Philip Lowe pushed back strongly on market chatter of a rate hike as early as next year, reiterating that a move was unlikely until 2024 at the earliest.
He also said the recent rise in bond yields was good news if it meant the market was starting to believe policy would be successful in delivering higher wages and inflation.
The underlying tone of this speech was unambiguously dovish, said SuLin Ong, head of Australian and New Zealand fixed income strategy at RBC Capital Markets.
In particular, the discussion around maximum employment, challenges to wage growth and achieving sustained withintarget inflation reinforces the likelihood of a prolonged period of low rates and even more QE beyond the current two programs, Ong added.
That was a relief to the bond market for the short term, though if the RBA…