The Australian and New Zealand dollars held their ground on Thursday with investors wary of making any big moves before the release of the results for the stress test of European banks later this week. Europe's bank supervisors are set to publish the results of its stress test of 91 banks on Friday, and investors are worried the test would show many banks need to raise cash.
If that is so, markets could be spooked and a sell-off in riskier assets might last for days. Given the uncertainty, the Australian dollar traded at $0.8773, reclaiming little of its losses overnight, but still well above Monday's lows of $0.8633. It slipped on the yen to 75.74, from Wednesday's 76.89. Safe-haven bond futures benefited from the uncertainty. Three-year futures rose 0.02 points to 95.31, and ten-year futures added 0.035 pints to 94.85.
The Aussie had traded at $0.8827 here late Wednesday before a remark from Federal Reserve Chairman Ben Bernanke that the economic outlook was "unusually uncertain" led investors to sell riskier assets. In New Zealand, the kiwi dollar traded at $0.7136, compared with $0.7176 in late local trade on Wednesday.
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