{"id":57040,"date":"2026-08-20T02:57:30","date_gmt":"2026-08-20T02:57:30","guid":{"rendered":"https:\/\/www.vtmarkets.com\/en-asia\/uncategorized\/australian-and-new-zealand-dollars-retain-strength-as-powell-calls-for-rate-patience\/"},"modified":"2026-08-20T02:57:30","modified_gmt":"2026-08-20T02:57:30","slug":"australian-and-new-zealand-dollars-retain-strength-as-powell-calls-for-rate-patience","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/australian-and-new-zealand-dollars-retain-strength-as-powell-calls-for-rate-patience\/","title":{"rendered":"Australian and New Zealand Dollars Retain Strength as Powell Calls for Rate Patience"},"content":{"rendered":"\n

Jerome Powell, Chair of the U.S. Federal Reserve, has reassured the financial markets by emphasising a likely downward adjustment in future interest rates. This guidance follows a series of inflation reports that had stoked expectations of tighter monetary policy.<\/p>\n\n\n\n

\"Chart<\/figure>\n\n\n\n

Picture: AUDUSD prices on the rise as recorded on VT Markets trading app<\/a>.<\/em><\/p>\n\n\n\n

In the currency markets, the Australian dollar remained robust, maintaining its overnight gain of 0.8% and stabilizing at $0.6529, briefly touching $0.6540. This performance allowed it to surpass the 200-day moving average<\/a> of $0.6522, suggesting a continuation of its upward trajectory.<\/p>\n\n\n\n

The New Zealand dollar showed stability at $0.5926, holding steady after a 0.7% increase, though it approached the 20-day moving average of $0.5944 without breaking through, indicating potential resistance at this level.<\/p>\n\n\n\n

Powell\u2019s Stance on Interest Rates<\/strong><\/h3>\n\n\n\n

Powell’s comments came after the Federal Reserve decided to hold interest rates steady, a move that had been widely anticipated. His assertion that an increase in rates was unlikely in the near term provided relief to those concerned about a possible hawkish pivot in response to recent high inflation figures.<\/p>\n\n\n\n

Dollar Index Falls, Yen Surge<\/strong><\/h3>\n\n\n\n

The broader impact on the U.S. dollar was negative, with the dollar index falling 0.6% against major currencies. This decline was exacerbated by a sharp rise in the yen<\/a>, likely spurred by intervention from Japanese financial authorities, highlighting the sensitive balance central banks maintain in global currency markets.<\/p>\n\n\n\n

Australian government bonds<\/a> mirrored the positive response seen in U.S. Treasuries, with yields on three-year bonds falling 5 basis points to 4.072% and ten-year yields also decreasing by the same margin to 4.460%. These movements reflect a flight to safety and investor alignment with Powell\u2019s cautious stance.<\/p>\n\n\n\n

Australia’s Economic Outlook<\/strong><\/h3>\n\n\n\n

Australia reported a significant narrowing of its trade surplus in March to the lowest point in more than three years, which might pose challenges for economic growth in the first quarter. Additionally, a smaller-than-expected increase in building approvals by 1.9% in March suggested that issues in the housing market, particularly supply shortages, continue to exert upward pressure on property values.

You might be interested: Australian Shares Rise with an Eye on Upcoming Federal Reserve Meeting<\/a><\/strong><\/p>\n\n\n\n

The upcoming policy decision by the Reserve Bank of Australia<\/a> is now in sharper focus, with market participants anticipating a potential shift towards tighter monetary policy in response to inflation concerns.\u00a0<\/p>\n\n\n\n

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Start trading now \u2014 click here<\/a> to create your real VT Markets account.<\/b>\n\n<\/p>\n\n","protected":false},"excerpt":{"rendered":"

Jerome Powell, Chair of the U.S. Federal Reserve, has reassured the financial markets by emphasising a likely downward adjustment in future interest rates. This guidance follows a series of inflation reports that had stoked expectations of tighter monetary policy. Picture: AUDUSD prices on the rise as recorded on VT Markets trading app. In the currency Continue Reading<\/a><\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[],"class_list":["post-57040","post","type-post","status-publish","format-standard","hentry","category-analysis"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t