CANBERA (dpa-AFX) - The antipodean currencies such as the Australia and New Zealand dollars strengthened against their major currencies in the Asian session on Monday, as Asian stock markets traded higher, on an improved outlook for interest rates after US Fed Chair Jerome Powell's dovish comments at the conference in Jackson Hole on Friday. Powell said economic risks are 'shifting' and a rate cut may be warranted.
He added that 'risks to inflation are tilted to the upside, and risks to employment to the downside - a challenging situation'. His remarks have increased investor confidence that the Fed will lower interest rates next month.
Following Powell's remarks, CME Group's FedWatch Tool jumped to indicate an 85.2 percent chance the Fed will lower rates by a quarter point next month, up from 75.0 percent a day earlier.
Crude oil prices traded higher, as expectations of a Russia-Ukraine peace deal waned with no progress. West Texas Intermediate crude for October delivery was up $0.13 or 0.20 percent at $63.65 per barrel.
Meanwhile, traders expect the Reserve Bank of Australia (RBA) to maintain its prudence, following last week's rate drop. Investors do, however, expect the central bank to start easing again in November with a bigger rate decrease of 50 basis points.
Another boost to the NZD has come from New Zealand's better-than-expected retail sales numbers.
Data from Statistics New Zealand showed that the total volume of retail sales in New Zealand was up a seasonally adjusted 0.5 percent on quarter in the second quarter of 2025, coming in at NZ$25 billion. That beat forecasts for an increase of 0.1 percent following the 0.8 percent gain in the three months prior.
The value of seasonally adjusted retail sales was NZ$31 billion, up 0.1 percent.
In the Asian trading today, the Australian dollar rose to a 1-week high of 0.6505 against the U.S. dollar, from Friday's closing value of 0.6490. The aussie may test resistance around the 0.66 region.
Against the yen and the euro, the aussie advanced to 95.72 and 1.8011 from last week's closing quotes of 95.37 and 1.8053, respectively. If the aussie extends its uptrend, it is likely to find resistance around 97.00 against the yen and 1.78 against the euro.
Against the Canada and the New Zealand dollars, the aussie edged up to 0.8992 and 1.1069 from last week's closing quotes of 0.8973 and 1.1061, respectively. On the upside, 0.91 against the loonie and 1.11 against the kiwi are seen as the next resistance level for the aussie.
The NZ dollar rose to a 5-day high of 0.5881 against the U.S. dollar, from Friday's closing value of 0.5868. The kiwi is likely to find resistance aroun
Against the yen and the euro, the kiwi advanced to 86.53 and 1.9926 from last week's closing quotes of 86.22 and 1.9969, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 88.00 against the yen and 1.95 against the euro.
Looking ahead, U.S. Chicago Fed national activity index for July and U.S. new home sales for July is slated for release in the New York session.
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