SYDNEY, May 4 Reuters The Australian dollar lagged on Tuesday as the countrys central bank sharply upgraded forecasts for the local economy yet still predicted no tightening in its superloose policy until at least 2024.
The Aussie faded 0.2 to 0.7742, well within the 0.7690 to 0.7815 range that has held for the past couple of weeks.
The New Zealand dollar dipped a touch to 0.7180, but found solid support at 0.7150. Resistance lies at 0.7215 and last weeks twomonth top of 0.7286.
The Reserve Bank of Australia RBA wrapped up its May policy meeting by holding rates at 0.1 as widely expected, while reiterating a hike was unlikely until 2024.
The commitment to longterm stimulus came even as the bank turned more bullish on the outlook. Notably, the bank now saw unemployment falling to 4.5 by the end of next year, down a full percentage point from its previous forecast and closer to estimates of full employment.
The RBA said it would decide at its July meeting whether it would roll over its threeyear bond target from the April 2024 line to the November 2024 note, and whether to expand its bond buying programme for a third time.
Analysts suspect that a decision not to roll over the bond target would be seen in the market as an early step toward tapering, which could put upward pressure on bond yields. We reiterate our view that the Bank will announce an additional A100 billion of bond purchases in July, though we expect it to maintain the April 2024 bond for its 3year…