Australian and New Zealand dollars higher

The Australian and New Zealand dollars nudged higher on their US counterpart on Tuesday, helped by higher commodity prices, while the Aussie held near record peaks on the euro. Good performances by regional equity markets in Shanghai, Hong Kong and Australia, boosted by a two-year high in Wall Street on Monday, helped the Aussie.
The Aussie was up at $0.9960, from $0.9932 late in New York and a recent low of $0.9828. The next target for the Aussie is another tilt at parity, which was last achieved on December 14. Support was seen at $0.9910 and $0.9860. The Aussie was also strong at A$1.3220 per euro having touched a record peak of A$1.3176 on Monday. The NZ dollar was also firmer near one week high, holding around $0.7455 in late trade, after touching $0.7473, the best since December 15.
Not to mention higher commodities prices which also lifted the high-yielding currency with spot iron ore reaching a seven-month high at $169.60 on Monday. Moreover, the CRB index climbed another 1.1 pct on Monday to a two-year peak of 324.27, finally breaking major resistance at 320.80 after five previous attempts. "It looks as though everything is green today... It's a risk positive day," said Sean Callow, currency strategist at Westpac Bank.
The euro did get a modest bounce after China's vice premier said China supported efforts by the EU to calm global markets in the wake of Europe's debt crisis. That was not really new but proved enough to trigger a short-covering rally in holiday-thin trade. The euro rose 0.3 percent on the day to $1.3176, pulling the Aussie higher on the US dollar.
But traders were sceptical the kiwi could defend its gains as the three-year swap yield gap narrowed over 20 basis points this month. "Unless we see a sustained recovery in this spread, we suspect the kiwi will encounter headwinds on any rallies towards $0.7500," said Bank of New Zealand strategist Mike Jones. Near-term support for the kiwi is expected around $0.7340 and $0.7328. On the upside $0.7435, the low of December 8 and previous support level, is seen as first line of resistance ahead of $0.7470/80. New Zealand data remained mixed, with migration gains for November little changed from the previous month while an employee confidence survey showed a lift in sentiment. A slew of recent weak data, including retail sales, has weighed.