Forex News

Aussie & NZ dlrs firmer as support holds, data eyed

16 October, 2012 - Reuters

WELLINGTON/SYDNEY, Oct 15 (Reuters) - The New Zealand and Australian dollars edged higher on Tuesday as support held once again and investors paused for inflation data and minutes of the last Reserve Bank of Australia's (RBA) policy meeting.

  • Australian dollar around $1.0254 from Monday's late local level of $1.0217, having ranged $1.0203 to $1.0259 overnight.
  • Aussie seen range trading for near term, with $1.0220 seen as first line of support ahead of Monday's low of $1.0203. Last Thursday's high of $1.0294 likely to cap any rally.
  • The New Zealand dollar also perkier at $0.8186, just below its overnight high, compared with Monday's late local $0.8141.
  • Kiwi support once again holds around $0.8130/40 level, leaving that area once again as solid support, with the topside capped at $0.8220.
  • New Zealand third-quarter inflation data due at 2145 GMT, with a quarterly rise of 0.6 pct expected, leaving the annual rate around a 12-year low at 1.1 percent.
  • It would take a big surprise to change the outlook for steady rates. Analysts see the Reserve Bank of NZ holding its cash rate at a record low 2.5 pct well into next year.
  • Recent NZ data, such as a survey of manufacturing and service sector activity, sentiment surveys and consumer spending, have had a downbeat tone, stirring talk of a possible RBNZ rate cut. Still, market pricing implies only a 12 percent chance of an easing next week.
  • Minutes of the Reserve Bank of Australia's October meeting are due out at 0030 GMT. Will be scrutinised for signs that the RBA is ready to cut rates again as soon as next month. Markets put a two-in-three chance of a November move.
  • Dovish comments from Reserve Bank of Australia Governor Glenn Stevens in Tokyo last Friday have only added to the rate cut expectations.
  • Euro falls amid the ongoing uncertainty over Spain's bailout intentions, and whether Greece can agree on new austerity measures with its lenders. Focus on a European Union summit later this week.
  • U.S. dollar rises to a one-week high against the yen after data shows U.S. retail sales up 1.1 pct, above expectations, boosting hopes of stronger economic growth in the third quarter.
  • Stocks rise on the better U.S. data and corporate earnings, helping to lift risk sentiment.
  • Antipodeans benefit from gains against the yen, with the Aussie up 0.3 percent to 80.67 , while the kiwi gains 0.4 percent to 64.38 .
  • Euro retreats a shade against the Aussie at A$1.2628 and to NZ$1.5821 against the kiwi. The Aussie also gives back some of its recent gains against the kiwi to NZ$1.2523 .
  • New Zealand government bonds flat at short end, while longer-dated debt has a mild offered tone.
  • Australian government bond futures muted, with the three-year contract down 0.01 points at 97.650, and the 10-year contract flat at 97.075.
  • 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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