Antipodean currencies under pressure

The Antipodean currencies were in focus in the Asian session on Thursday. Both the New Zealand and Australian dollars were under pressure.

The New Zealand dollar was one of the worst performing major currencies after some dovish comments from the Assistant Governor of the Reserve Bank of New Zealand. John McDermott commented that a cut in interest rates was more likely than a rate hike. If inflation pressures weaken further, then monetary policy should remain “stimulatory for a prolonged period”.

“Evidence of weakening demand and domestic inflationary pressures would prompt us to consider lowering interest rates,” McDermott said.

NZD/USD plunged to $0.7566 by the end of the Asian trading session and continued to fall further as Europe opened, falling further to $0.7560.

Meanwhile the Australian dollar came under pressure due to weak Chinese PMI. The flash manufacturing sector activity report by HSBC came in below 50. It fell to a 12-month low of 49.2 in April compared to 49.6 in March. China is Australia’s major trading partner so the data tends to have an impact on the aussie. AUD/USD last traded at $0.7736 heading in to the European session.

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