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AUD Trades Sideways as RBA seen Lagging on Rate Rises

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SYDNEY, May 24 Reuters The Australian dollar traded near the lower end of its fiveandahalf week range against the greenback on Monday, as the countrys central bank is seen lagging global peers in tightening monetary policy despite a strong economic recovery.

Its New Zealand counterpart was also trading sideways and at the lower end of its multiweek range, ahead of a monetary policy decision this week and as data showed retail sales volumes rose in the first quarter. nAZN0170SE

The Aussie was trading 0.05 higher at 0.7735. The commodityprice sensitive currency has traded between 0.7675 and 0.7891 since April 15, as skyrocketing commodities prices have prompted Chinas government to curb unreasonable cost increases.

The New Zealand dollar edged 0.15 higher to 0.7174 , trading around the midpoint of its range since midApril of between 0.7117 and 0.7304.

Unlike last year, markets have now largely if not fully priced in a global Vshaped recovery that was aided both by policy and positive vaccine developments, Morgan Stanley strategists said in a note.

2Q21 will be the last hurrah for AUDUSD strength…we think AUDUSD will begin to diverge from risk assets as the primary driver of the AUD shifts from global risk demand and global growth to policy divergence.

Australias central bank will likely be slower than its peers to tighten monetary policy as wage growth and inflation remain below its target by more than in other countries such as the United States, Canada, UK and…

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