FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, notes that the Australian and New Zealand dollars have benefitted from supportive domestic developments which are helping to offset the building downside risks from renewed weakness in commodity prices. Key Quotes “The Australian dollar has derived support from the release of another stronger than expected Australian employment report which revealed that the economy added an unbelievably strong 71.4k jobs in November which was the second consecutive robust monthly employment gain. For comparison employment growth has averaged 63.8k over the last two months compared to an average of 28.7k over the last year and 18.8k over the last two years.” “For the RBA the report provides further reassurance that the non-mining economy is picking up which is more than helping to offset ongoing weakness in the mining sector. As a result the RBA is more likely to leave its monetary policy stance unchanged for longer rather than consider additional easing in the near-term which is offering support for the Australian dollar.” “The RBNZ also provided a less dovish than expected policy announcement overnight. The RBNZ lowered its key policy rate as expected by 0.25 percentage point to 2.50% but more importantly signalled that there is now a higher hurdle for further easing which has offered support for the New Zealand dollar.” “In the policy statement, the RBNZ signalled that they now expect to achieve their inflation target at current interest rate settings although they will reduce rates if circumstances warrant. It marks a shift from their last statement which signalled some further reduction in interest rates seems likely. It was a message which was also echoed in the updated 90-day bank bill rate forecasts that signalled the key policy rate is expected to remain roughly unchanged out into 2018 including some risk of a further rate cut towards the second half of next year.” “The most dovish element in the statement referred specifically to the New Zealand dollar whose recent rise was described as unhelpful. The RBNZ stated that it believes further depreciation is appropriate in order to support sustainable growth. The RBNZ will become even more concerned if New Zealand dollar strength following today’s policy meeting proves sustainable.” “Overall, the supportive domestic developments in both Australia and New Zealand have increased upside risks to our Australian and New Zealand forecasts although with commodity prices still declining we remain comfortable to maintain a bearish outlook for now.” For more information, read our latest forex news.