The Australian and New Zealand dollars consolidated hefty gains on Wednesday after enjoying their biggest rally in a year as investors wagered on future U.S. rate cuts and pulled bond yields down globally. They got further support as Chinese data on retail sales and industrial output topped forecasts, boding well for continued Chinese demand for commodities.
A soft report on U.S. inflation led investors to price out almost any chance of another hike from the Federal Reserve and instead pencil in 100 basis points of easing for 2024. That was a huge reprieve for the Antipodean currencies which had been heavily sold as a proxy for global rate risk.
