The Australian and New Zealand currencies lost momentum on Friday after briefly hitting one-week highs against the greenback, snapping two sessions of gains as investors locked in profits ahead of the weekend. Worries that Beijing may adopt more stringent measures to cap inflation, coupled with market talk that Hong Kong will try to cool the property sector, tempered risk appetite and took a toll on the antipodean pair.
The market was also waiting for further developments in Ireland, which is discussing an aid package worth tens of billions of euros from European partners and the IMF for its shattered banks. All these factors left investors unwilling to push the Aussie and kiwi dollars higher just yet.
"We've had two pretty good risk-on days and I suspect some people might just be taking a bit of risk off the table and see what the weekend brings," said Annette Beacher, head of Asia-Pacific research at TD Securities in Singapore. The Australian dollar rose as high as $0.9913, a level last seen on Monday, before retreating to $0.9849. It was little changed on the week but still 1.3 percent above Tuesday's low around $0.9725.
Support is seen at Thursday's low of $0.9786, while stiff resistance awaits the Aussie at $0.9920, ahead of further headwinds around parity. "It's pretty thin out there today. We've come lower on the back of losses in Shanghai stocks and the Hang Seng," a currency trader said.
The New Zealand dollar, which came within a hair's breadth of $0.7800, its highest level since November 12, fell back to $0.7752, closing in on near-term support seen around $0.7745, followed by Thursday's low of $0.7697. The kiwi was unmoved by a speech from RBNZ Governor Alan Bollard, in which he said the country's medium outlook is favourable but the recovery process will be drawn out. On the cross rate, the Aussie eased to NZ$1.2689, drifting towards the lower end of this week's slim range roughly between NZ$1.2671 and NZ$1.2800.
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