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Aussie hits 5-mth high vs USD, kiwi holds firm

02 February, 2012 - Reuters

WELLINGTON, Feb 2 (Reuters) - The Australian dollar reached a five-month high against the greenback on Thursday, while the New Zealand dollar also firmed thanks in part to upbeat local data.

  • The Aussie rises to $1.0758 -- highs not seen since at Sept 1. A move above $1.0765 will take it back to levels last seen in early August. It was last at $1.0731.
  • Traders said break of option barrier had triggered stop loss buying, pushing the currency into the $1.0750/65 resistance band. A break there will trigger more stops and open the way for a run towards $1.10.
  • The move came in the wake of stronger-than-expected local trade data.
  • Aussie outperforms the kiwi, rising 0.1 pct to NZ$1.2865

    • .

  • Against the greenback, the kiwi gains 0.2 pct to $0.8338, having rallied 1.5 pct offshore to $0.8357, the best since early September.
  • It scaled fresh highs on the euro. Single currency

    last at NZ$1.5796 vs an all-time low of NZ$1.5763, while it struggles on the Aussie at A$1.2277 , not far off a record low of A$1.2220 struck in mid-January.

  • Kiwi finds further support with the first rise in eight months of NZ's main commodity export prices.

  • Risk sentiment improved overnight after a batch of manufacturing data from China to Germany eased market's worst fears about global growth.
  • Kiwi undeterred by lower dairy prices at the latest auction. Prices have stayed at a relatively high level despite recent softening.
  • Chart shows the currency in overbought territory and momentum waning, with a test of $0.8214 possible and resistance sitting around $0.8343, then $0.8373.
  • Still, low U.S. interest rates likely to limit any major selling in the Antipodeans, which have shone so far this year.
  • Aussie and kiwi have been in demand since the Federal Reserve pledged to keep rates near zero for longer. On top of that, another round of possible quantitative easing would encourage the use of the dollar as a funding currency for carry trades.
  • Australian bond futures give back recent hefty gains with the three-year contract off 0.06 points at 96.830. The 10-year contract eases 0.055 points to 96.215, having hit an all-time high of 96.300 on Wednesday. The implied yield of 3.785 percent is well-below the overnight cash rate of 4.25 percent.
  • Australia debt is considered relatively safe due to the government's strong fiscal position. The nation is one of only 14 nations still rated triple A by S&P.
  • NZ government bond prices follow, with yields up 5 bps along the curve.

    (Australia and New Zealand bureaux)

    Copyright Thomson Reuters 2012. All rights reserved.

    The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

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