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Australia’s slow vaccine roll-out had an impact on the investor sentiment and the Australian dollar opened lower on Monday. However, the NZ dollar remained unchanged.
The Australian dollar was down by 0.15%, at $0.7606, as an extension of Friday’s losses, which was a result of worries about the delay in the Coronavirus vaccine roll-out programme. The New Zealand dollar (NZD) remained strong, hovering around the $0.7031 level.
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The Australian dollar remained in a weak spot due to the disappointing news on the vaccination front. Investors also factored in the expiration of Australia’s wage subsidy scheme.
In the recent weeks, the currency had consolidated around $0.7650. According to analysts, the strengthening of USD and the delay in the vaccine roll-out programme will be negative factors for the Australian dollar. However, the Commonwealth Bank of Australia expects this weakness to be short-lived.
While last week, the USD lost against the Australian and the New Zealand currencies, this week also, two currencies (AUD and NZD) stood firm against the US dollar. The Australian dollar was range bound, down only three basis points at AUD 0.7752, pretty much in the range of AUD0.75 and 0.80.
In the month of March, prior to the Fed’s announcement, the NZ and the Australian dollars remained stable even though the Japanese Yen and other currencies lost. The NZ dollar remained unchanged at NZ$0.7199 far from its February high of NZ$0.7464.
The US dollar rose against some currencies, while the Australian dollar and the New Zealand dollar remained firm and did not get weakened.
Analysts were bullish on the Australian and the NZ dollars and had said that both the currencies were likely to continue rising as both the countries were seeing an economic recovery, as a result would benefit from a spurt in the global trade.
However, in the last week of March, as Central Banks across the world did not increase the interest rates, Bond prices in New Zealand and Australia edged high. This had an impact on the currencies. The Australian and the NZ dollars ended the last week of March lower as the investors were sure that there would be no interest rate hikes. The Australian dollar was down by almost 1.5%, at AU$0.7590, much below the support level o fAU $0.7615.
The New Zealand dollar, however, performed the worst in the last six months by dropping almost 2.5% at NZ $0.6965.