The Australian dollar eked out a modest bounce on Tuesday as the prospect of more Chinese stimulus lifted key commodity prices and squeezed short positions in the beaten-down currency. The Aussie dollar crawled up to $0.7086 and away from a 32-month trough of $0.7041, but faces immediate resistance around $0.7097.
Dealers said the bounce owed much to how short the market had become in the last couple of weeks as the Aussie fell from around $0.7300. Speculators' net short positions in the futures market stood at a net 71,718 contracts worth $5.2 billion.
The rally was helped by gains in Chinese iron ore and coal futures on expectations Beijing would ramp up infrastructure spending to aid the economy. The New Zealand dollar was stuck at $0.6443, having managed only a minor bounce from Monday's $0.6424 low. New Zealand government bonds were little changed, as were Australian government bond futures.
The three-year bond contract eased 1.5 ticks to 97.855, while the 10-year contract held steady at 97.2100. China must take strong stimulus measures to support growth at a "critical" period, the state-backed Global Times declared a in commentary on Tuesday. Australian data was also upbeat with a survey showing businesses keen to hire as sales and profits remained strong.
Comments
Comments are closed.