SYDNEY, April 22 (Reuters) - The Australian and New Zealand
dollars hovered near recent one-month highs on Thursday with
major commodity-linked currencies getting a boost from a hawkish
tilt by the Bank of Canada which expects to start tightening
policy next year.
The BoC signalled it could start hiking interest rates in
late-2022, providing a lift to the Canadian dollar, with
small spillovers to other commodity currencies such as the
Aussie and the kiwi dollars.
The Australian dollar was last at $0.7750, not far
from a one-month high of $0.7816 reached earlier this week.
Next stop is around $0.7820 levels with solid chart support
seen around $0.7720 region.
The New Zealand dollar was flat at $0.7212 after
going as high as $0.7227 on Tuesday, a level not seen since
"The hawkish tilt by the Bank of Canada (BoC) was the
biggest event overnight," Tapas Strickland, economist at the
National Australia Bank, wrote in a morning note.
"The key question for markets is does the BoC statement
prove to be a watershed moment for central banks in which they
revert back to outcomes-based guidance as the data improves and
away from calendar-based guidance that was calibrated in the
depths of the pandemic?"
The BoC held its overnight rate at 0.25% on Wednesday and
signalled it could start raising rates late next year as it
sharply boosted its outlook for the Canadian economy and reduced
the scope of its bond buying program. The Canadian dollar jumped
Investor attention will next be on U.S. Federal Reserve
Chair Jerome Powell next week as well as on the Reserve Bank of
Australia's (RBA) monthly policy meeting on May 4, Strickland
Australia's unemployment rate has fallen much quicker than
forecast led by a boom in the jobs market thanks to timely and
sharp monetary and fiscal stimulus as well as the country's
success in curbing the pandemic and allowing its domestic
economy to largely reopen.
Other domestic data in both Australia and New Zealand have
also surprised expectations.
New Zealand government bonds rose, sending yields
about two basis points lower at the long-end of the curve.
Australian government bond futures were mixed, with the
three-year bond contract down a tick at 99.73. The
10-year contract rose 3 ticks to 98.34.
(Editing by Ana Nicolaci da Costa)