The Australian and New Zealand dollars extended gains on Tuesday, buoyed by a broadly weak US counterpart and a recent rally in metals prices including copper and iron ore. The Aussie rose to $0.9266 from $0.9247 in early trade, having jumped nearly 1 percent in the prior session as investors continued to trim short positions.
The New Zealand dollar climbed a one-month peak of$0.8007, helped by cross selling in euro and yen. Soft US housing data offered an excuse to sell the greenback and added to the perception the US Federal Reserve is in no rush to trim its stimulus programme.
That is one reason the Aussie dollar has managed to recoup some ground after skidding to a three-year trough below 90 cents earlier this month. "The market was very short the Aussie and very long the US dollar so there is a bit of positioning squaring," said Matthew Johnson, a rate strategist at UBS, seeing room for the currency to test $0.9340 in the short-term.
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