(1) The Australian and New Zealand dollars hovered near five-and-a-half-month highs on Tuesday as their recent winning streak met resistance and mixed data on factory activity in major Asian countries kept sentiment fragile.
(2) The Australian dollar fell 0.66% to 0.6780 against the US dollar at one point and is now trading at $0.6805, up 7.6% over the past two months. The Aussie is facing resistance at its highest level since mid-July at $0.6871, which it touched on Friday.
(3) NZD-USD is currently down 0.6% at 0.6292 and closes 2023 down 0.5%. The main resistance is at $0.6370.
(4) Manufacturing activity in large Asia expanded faster than expected in December, a private survey on Monday showed a sharp contrast to the contraction in manufacturing in Sunday's official survey.
(5) Yang Yuting, chief economist of ANZ Greater China, said that these surveys show that the risk of deflation in the world's second-largest economy has increased.
(6) Yang Yuting also said, "Strong fiscal and monetary stimulus measures are needed in 2024 to break the negative spiral."
(7) In Australia, data showed that Australian house prices rebounded by 8% last year, but interest rate hikes and the deterioration of affordability slowed growth to some extent in the last months of last year. The market remains betting that the RBA has completed its monetary policy tightening and that the next step is to cut interest rates
(8) Similarly, despite the recent apparent hawkish bias of the RBNZ, the market is also expected to cut rates as the economy has underperformed under the impact of rate hikes
