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Australia, NZ dlrs Try to Rally, Lockdowns Make it Hard

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SYDNEY, July 22 Reuters The Australian and New Zealand dollars were trying to sustain a rally on Thursday as global sentiment improved a little, though the mounting economic impact of lockdowns in Australia meant risks remained to the downside.

The Aussie bounced to 0.7350, having hit an eightmonth trough of 0.7290 overnight. It needs to get above resistance at 0.7410 to break the current downtrend, which has now been running for five weeks.

The kiwi dollar was hanging on at 0.6950, after also touching an eightmonth low at 0.6882. Support lies at 0.6920 with resistance around 0.6980 and 0.7050.

A rebound in world stock markets helped lessen the pressure on risk currencies, and the Aussie got some help from data showing Australia boasted a record goods surplus in June.

The preliminary trade figures showed goods exports jumped 8 in June to deliver a surplus of A13.3 billion 9.78 billion, with iron ore surging on strong Chinese demand.

However, the domestic economic outlook has taken a body blow from spreading coronavirus infections in Sydney which look certain to keep the city locked down into August.

With cases of local community transmission continuing at uncomfortable levels, and amid a low rate of vaccination, the possibility of further lockdownextensions appears very real, Nomura economist Andrew Ticehurst said.

He estimated the lockdowns could see gross domestic product shrink by a steep 1 this quarter.

Unlike many other economists, he felt the Reserve Bank…

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