Friday, 13 March 2015 10:09
SYDNEY/WELLINGTON: The Australian and New Zealand dollars edged up on Friday as a shakeout in bullish US dollar positions gave the beleaguered Antipodeans some respite.
The Australian dollar was at $ 0.7697, having jumped 1.4 percent on Thursday when disappointing US retail sales hurt the US dollar and triggered a wave of short covering. Resistance was found around $ 0.7735, then $ 0.7775.
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“The greenback finally hit a bump and the long overdue consolidation may be upon us,” said Stephen Innes, senior trader, at OANDA Asia Pacific.
The Aussie touched a six-year trough of $ 0.7561 on Wednesday, putting it on track to show a tiny weekly loss of 0.1 percent. It has shed 15 percent in the last 12 months.
“Traders will likely use this respite to reflect on the magnitude of the recent US dollar moves as they start to position for the monthly two-day Federal Open Market Committee meeting stateside next week.”
The Aussie, however, stood tall against the euro at A$ 1.3776 , which slumped overnight to its lowest in nearly two years. Moving average studies suggest further downside with a target of A$ 1.3596, the 61.8 percent retracement of the 2013/2014 rally.
Likewise, it was at NZ$ 1.4352, not far from an all-time low of NZ$ 1.4286 set on Thursday. The euro has shed 2.6 percent this week.
Against the US dollar, the New Zealand dollar edged up to $ 0.7400 after the US dollar’s rally ran out of steam following weak data.
The kiwi hit a one-week high of $ 0.7450 in the aftermath of the Reserve Bank of New Zealand’s monetary statement which pointed to the benchmark rate being left unchanged for an extended period.
“The NZ dollar has rocketed higher on the bank’s flat-line 90-day bill projections and upbeat characterisation of the economy,” said ANZ analysts in a note, underpinning the kiwi in the near term.
Support is seen at $ 0.7340 with the overnight high of $ 0.7450 capping the topside. A survey showed manufacturing activity rebounded solidly in February after it unexpectedly contracted sharply the month before.
New Zealand government bonds had a hint of an offered tone at the short end of the curve, but yields mostly unmoved.
Australian government bond futures eased, with the three-year bond contract off 4.5 ticks to 98.120. The 10-year contract shed 3 ticks to 97.4950.
Copyright Reuters, 2015
