The Australian and New Zealand dollars bounced on Friday as investors cut bearish positions following a break of chart resistance, but the high-beta currencies were seen vulnerable to renewed concerns about the global growth outlook. Both Antipodean currencies reached one-week highs against the euro, which skidded to A$1.2378 and NZ$1.5608.
The common currency got stung overnight after a batch of surveys showed euro zone business activity remained weak despite the European Central Bank's recent bold plans aimed at tackling the region's debt crisis. The euro has shed a cent and a half in four sessions and a break below A$1.2314, the 61.8 percent of the May-August decline would open the way to test A$1.2314, the 50 percent Fibonacci retracement.
The New Zealand dollar edged up to $0.8306, from $0.8285 in early trade, supported by positive sentiment following a better-than-expected reading of the nation's GDP. The selling of the euro and upbeat equities across Asia helped lift the Antipodeans against the greenback. The Aussie rose 0.4 percent on the day to $1.0479, having bounced from a low of $1.0367 overnight.
"There were a few stop-loss activities at $1.0410 which helped to get the first leg up to $1.0440, then it looked like a bit of a short-squeeze to bring it to where it is now," said Michael Turner, a strategist at RBC Capital Markets. Traders reported more stops above $1.0500, while sellers were sighted around $1.0475. A clean break below $1.0400 would target $1.0340, the 61.8 percent retracement of the move from $1.0165 to $1.0625.
For the week, the local dollar was on track to post a loss of 0.7 percent. It has retreated from a five-month high of $1.0625 set a week ago. Analysts said the Aussie dollar looked vulnerable due to growing worries about the recent steep falls in the prices of Australia's top exports including iron ore.
Comments
Comments are closed.