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AUD, NZD Find Cold Comfort in Hot Data after Fed Shift

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SYDNEY, June 17 Reuters The Australian and New Zealand dollars struggled to regain some ground on Thursday as surprisingly strong domestic data softened only a little of the blow from a hawkish turn in U.S. monetary policy.

The Aussie edged up to 0.7626, from a nineweek low of 0.7598, but was well short of Wednesdays top of 0.7715. The break of chart support at 0.7645 was a bearish development and risked a retreat to the 200day moving average at 0.7552.

The kiwi dollar fared somewhat better with a bounce to 0.7088, from a nineweek trough of 0.7043, but again was off Wednesdays 0.7155 high.

It was also perilously close to its 200day moving average at 0.7039 and a break could easily see it retest the 2021 low of 0.6944.

Both currencies had slid when the U.S. Federal Reserve surprised by projecting possible rate hikes in 2023 and confirmed it was discussing whether to taper bond buying.

The shift sent Treasury yields higher and lifted the U.S. dollar across the board.

There was some relief in data showing New Zealands economy rebounded by a strong 1.6 in the first quarter driven by rising household consumption and construction.

That was well above the Reserve Bank of New Zealands RBNZ forecast of a 0.6 fall and supported its projection for a rate hike as early as the third quarter of 2022.

Todays strong report, we may see expectations shift toward an earlier liftoff rates than the Reserve Bank has scheduled, said Jarrod Kerr, chief economist at Kiwibank.

If data…

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