The Australian and New Zealand dollars extended gains versus the euro as more easing by the European Central Bank and the ongoing Greek debt crisis dented appetite for the common currency. They had less luck against a firm US dollar with the Aussie sluggish at $0.7826, not far from a three-week low of $0.7804 set on Monday. Support was found at a major retracement level of $0.7775.
It has shed more than 3 cents since it peaked above 81 cents earlier this month. Much of the slide is due to a broadly stronger US dollar on expectations of an interest rate hike later in the year by the Federal Reserve. Even a bounce in iron ore prices has left Aussie dollar bulls cold. The mineral, Australia's top export earner, jumped 6 percent in three sessions.
The Antipodean currencies fared better against a wobbly euro which fell to A$1.3981, from Monday's peak of A$1.4077. The common currency has dropped 1.5 percent so far this month, largely due to renewed worries about Greece's finances. Support was found at A$1.3909. The euro also touched a two-week trough of NZ$1.4945, having slumped more than 4 cents in a week. Against its US counterpart, the New Zealand dollar was stuck at $0.7310 and just above recent lows around $0.7284. New Zealand data showed that an ongoing slide in exports of dairy products, the country's biggest earner, led to a widening in the annual trade deficit.
Investors are now waiting for co-operative Fonterra to release a forecast for farmgate dairy prices for the next 12 months. Any improvement on this year's eight-year low payout of NZ$4.50 ($3.29) per kilogram for milk solids could boost demand for the kiwi in the near term. New Zealand government bonds eased, nudging yields 1.5 basis points higher along the curve. Ten-year bond yields climbed to 3.82 percent, the highest since December. Australian government bond futures were mixed, with the three-year bond contract off one tick at 97.930. The 10-year contract was up one tick to 97.0950.
Comments
Comments are closed.