By Stella Qiu
SYDNEY, March 9 (Reuters) - The Australian and New
Zealand dollars were pinned down near four-month lows on
Thursday as hawkish comments from Federal Reserve Chair Jerome
Powell and caution ahead of U.S. payrolls data left bears in
control.
The Aussie hovered around $0.6585, the lowest rate
since early November and a support level it has bounced off in
the past two sessions. Overnight, it erased most of its
Wednesday gains, having rallied as high as $0.6628.
The kiwi was changing hands at $0.6108 after
dipping as low as $0.6086 overnight, its weakest level since mid
November. The Reserve Bank of New Zealand's hawkish bias
provided some impetus for the kiwi to advance against the
Aussie.
The Australian dollar has been under pressure since the
Reserve Bank of Australia signalled on Tuesday a likely pause in
rate increases in April. Diverging interest rate expectations
between the U.S. and Australia pushed local government bond
yields to their biggest discount against U.S. Treasuries in
almost four decades. In the second day of his testimony to Congress on Wednesday,
Powell reiterated his message that interest rates would have to
go higher and possibly rise at a faster rate. But he emphasised
that the course was not set and policy decisions would be data
dependent up to the Fed's next meeting in two weeks.
"The repricing of Fed versus RBA policy expectations has
been a significant factor behind the February and early March
AUD decline," said analysts at National Australia Bank in a note
to clients.
"What has so far failed to make any positive impression is
the sharp recovery in China economic activity in January and
February following the abandonment of its zero COVID strategy
last November."
Chinese data on Thursday pointed to tepid domestic demand
and fanned hopes of more policy stimulus from Beijing. The
consumer price index (CPI) for February was 1.0% higher than a
year earlier, and fell 0.5% from a month earlier.
Australia government bond yields were steady on Thursday,
with three-year bonds holding at 3.414% and 10-years at 3.699%.
(Reporting by Stella Qiu; Editing by Neil Fullick)
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