WELLINGTON/SYDNEY: The Australian and New Zealand dollars held firm in light year-end trade on Wednesday, mirroring subdued action in broader markets ahead of an Italian debt auction later in the week.
The Aussie was at $1.0162 versus $1.0154 late in New York, having traded in a slim 34-pip range between $1.0137/71. Immediate resistance was seen at $1.0184, the 61.8 percent retracement of the Dec. 8 to 15 decline.
The kiwi dollar also drifted in a narrow $0.7717/57 range and was last at $0.7745, up 0.3 percent on the day. Support was pegged at the 21-day moving average around $0.7699, while the 50-day moving average at $0.7757 should limit its upside, traders said.
The kiwi shrugged off the impact of the strong earthquakes, which struck Christchurch on Dec. 23. It was also unmoved after Moody's on Friday reaffirmed New Zealand's Aaa sovereign rating with stable outlook. See
Both Antipodeans were also slightly firmer against the yen and euro. The common currency bought A$1.2857, not far off a record low around A$1.2820 set last week. Against the kiwi, the Aussie eased 0.2 percent to NZ$1.3108.
Traders said the market was pretty much in holiday mode as many players have already shut their books for 2011. Only small corporate transactions were driving the market.
"The only near-term risk I see is the Italian debt auctions this week," a trader said. "If they go poorly, then we may get some amplified moves to the downside."
Italy plans to raise up to 8.5 billion euros in the debt market on Thursday and markets are worried that its borrowing costs will remain unsustainably high.
Its 10-year bonds already yield more than 7 percent, a threshold that had forced other euro zone governments like Greece to seek bailouts.
Investors fear that Italy, although having different debt dynamics than Ireland, Greece and Portugal, could suffer the same fate, especially as it faces around 100 billion euros in bond redemptions and coupon payments between January and April.
Aussie debt futures also suffered from thin volumes, with turnover among the lowest for the year. The three-year contract eased 0.06 points to 96.870, and the 10-year contract shed 0.030 points to 96.185.
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