The Australian and New Zealand dollars were both hovering at one-month lows against their U.S. counterpart on Thursday, after the Reserve Bank of New Zealand left interest rates unchanged and as demand for the greenback remained broadly supported.
AUD/USD was little changed at 0.7818, the lowest since January 10.
The greenback was mostly underpinned by higher U.S. bond yields. The yield on benchmark 10-year Treasury notes were at 2.837% early Thursday, close to recent four-year highs.
But the dollar's gains were capped by sustained concerns over recent volatility on global stock markets. Equities wordlwide plummeted on Friday after a strong U.S. jobs report sparked concerns over rising inflation.
Markets began to stabilize on Wednesday but traders were still cautious as high bond yields could cause them to plunge again.
NZD/USD dropped 0.54% to trade at 0.7201, also the lowest since January 10.
Earlier Thursday, the RBNZ left its benchmark interest rate unchanged at 1.75%, in a widely expected decision.
Commenting on the decision, RBNZ Assistant Governor John McDermott said: “There is a significant probability that the next rate move could be an increase sometime in the future, and there’s also a substantial probability that the next move could actually be a cut.”
“If we saw big moves in inflation expectations, the market should expect the bank to act,” he added.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 90.14 by 02:10 a.m. ET (06:10 GMT), just off a more than two-week peak of 90.27 hit overnight.
Source by Fusion Media Ltd.