NZD and AUD Hold On To Gains As Commodity Prices Move Up

May 11, 2021 07:08 PM AEST | By Manika

NZD and AUD Hold On To Gains As Commodity Prices Move Up — Image source: Naruedom Yaempongsa, Shutterstock

Also Read: Australian, Kiwi Dollar Firm Ahead of Series of Global Events

Also Read: NZ Dollar Gains As Fed Is expected to Keep its Dovish Stance

The Kiwi dollar stood at $0.7259, almost touching a 10-week top at $0.7304. Its February peak was up at $0.7463.
The reasons for the excellent performance of both the currencies lie in the rising commodity prices. The Australian dollar in particular was buoyed by the rise in iron ore prices by 10%. Iron ore is Australia’s single-biggest export earner.

The increase in commodity prices over the last week has lent a lot of weightage to the Australian dollar and some analysts feel that it was very undervalued.

Also Read: Why Are the Australian and NZ Bond Prices Rallying and Currencies Edging Lower?

The recommendation for buy should now be raised from AU$0.7680 to AU$0.7785, said another forex analyst.

As far as bonds in Australia are concerned, the RBA was buying more bonds than the government was selling, this was keeping the yields lower.

However, the Yields in New Zealand have been rising, with the 10-year NZ10YT=RR having risen steadily for the last couple of weeks to reach 1.795%.

Going forward, due to supply problems, the commodity prices could remain higher, which in turn will keep the commodity currencies perform better as compared to USD, according to analysts.

Several currencies edged up against the USD. The British pound also was close to its strongest in February, Euro also moved higher, the Japanese yen was flat.

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