The Australian dollar rose to tackle stiff chart resistance on Tuesday, with investors waiting to see whether the Bank of Japan would hint at the possibility of further easing ahead. The Aussie scaled a fresh one-month peak of $0.9081 where it met a heavy technical barrier. It has tried four times in recent weeks to sustain a break above this year's peak in the $0.9080-90 area, which also marks the 38.2 percent retracement of its fall from October to January.
It was last at $0.9066, from $0.9028 in early trade, with dealers suspecting the bounce had more to do with positioning than with the minutes of the Reserve Bank of Australia released earlier in the session. "Markets are thin. The Aussie has been trying to get through this level for a while. It is just trying to trip stops," said David Scutt, a trader at Arab Bank Australia.
In minutes of its February 4 meeting, the central bank said it kept rates on hold at 2.5 percent as it saw signs policy stimulus was working to spur economic activity. The Aussie extended recent gains to 92.61 yen, from a low of 91.07 last week, as the market awaited the outcome of the Bank of Japan's policy meeting likely to come after 0300 GMT.
The New Zealand dollar was marking time at $0.8360, after hitting a one-month high of $0.8393 overnight. It has been rallying now for 11 sessions, in part due to a pullback in the US dollar, but faces resistance in the $0.8407/33 zone. "Currency markets will take note that further NZ dollar strength needs positive New Zealand (data) surprises to continue," ANZ analysts said in a note.
The kiwi was softer against the neighbouring Aussie dollar after the RBA minutes, but remained in recent ranges at NZ$1.0840. The local data flow resumes with a batch of numbers on Thursday, including fourth quarter producer prices, job adverts and consumer confidence. New Zealand government bonds were largely flat, with a hint of an offered tone along the curve. Australian government bond futures fell with the three-year bond contract down 2 ticks to 96.960. The 10-year contract lost 1 tick to 95.885.
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