Risk -sensitive currencies rose in early trading in the week supported by positive sentiment in the market which also drove up global stock markets and optimism factors from central banks.
The Aussie dollar welcomes news of New South Wales (NSW) and Victoria that will detail their plans to reopen the economy following rising vaccination rates rapidly approaching 70% and 80% two -dose targets for the adult population.
This supports the optimism of the Australian central bank (RBA) that economic growth will recover in the December quarter, after a significant contraction is expected to be recorded in the third quarter.
If the economy recovers, the RBA may be able to reduce its bond purchases in February, although it still insists that an interest rate hike is unlikely to happen until 2024.
Meanwhile, the kiwi dollar also rose amid expectations that the New Zealand central bank (RBNZ) will most likely start raising interest rates at its October policy meeting, and subsequently in November.
This expectation has driven New Zealand’s 10 -year bond yields up almost to this year’s high of 1.95%.
Moreover, news of a positive US infrastructure spending stimulus also supported overall market sentiment, particularly global stock markets and dragged the US dollar safe-haven lower in early trading in the week.
