The Australian and New Zealand dollars are slightly higher ahead of US inflation data

The Australian and New Zealand dollars rose on Tuesday after short-term US dollar and Treasury yields fell ahead of inflation data that could tip the balance in favor of the Federal Reserve’s interest rate break this week.

The Australian dollar rose 0.2% to $0.6762, after hitting a one-month high of $0.6774 on Friday. This resistance is still near-term, while the 200-day moving average at $0.6689 is key support.

The New Zealand dollar rose 0.1% to $0.6130, after hitting a three-week high of $0.6153 on Friday. Resistance is seen around $0.6150, while support is found at the 21-day moving average at $0.6125.

Both crashed after the US dollar slid slightly in Asia amid expectations that the Federal Reserve’s rate hike cycle will come to a halt on Wednesday.

The US inflation report due later today is expected to show a welcome slowdown in consumer inflation in May, with headline inflation ballooning to an annualized rate of 4.1% from 4.9% in April, a result that should bolster the Fed’s stance. .

Markets are currently estimating there is an 80% chance that the Fed will hold interest rates at this week’s meeting.

Earlier in the day, weak Australian business and consumer survey results and China’s decision to cut its short-term interest rate weighed on the Australian dollar.

“The Australian dollar suffered a few jolts in the ‘hour of weakness’ when Australian data was released alongside trade with China,” said Sean Callow, chief currency strategist at Westpac.

L’Aussie a glissé sous 0,6740 alors that le yuan s’est affaibli suite à la réduction des prices in pension of the Banque Populaire de Chine, mais s’est ensuite redressé alors que le American dollar perdait du terrain, at-he says .

Australian government bond yields fell on Tuesday. The 10-year benchmark yield fell 5 basis points to 3.910% while the three-year yield fell 1 basis point to 3.838%. (Reporting by Stella Keough; Writing by Jamie Fried)