The Australian and New Zealand dollar held their ground against the greenback on Monday, but struggled to advance on the yen as the market tempered expectations for an aggressive policy easing by the Bank of Japan this week. The Aussie paused at $1.0362, from $1.0366 in New York on Friday, having gained 0.3 percent last week. Support was seen around the 200-day moving average at $1.0340 and resistance at $1.0385, the high on October 26.
The New Zealand dollar was a touch softer at $0.8212, from $0.8224, but demand suspected below a session trough of $0.8200 limited the downside. It remained within sight of a three-week high of $0.8243 hit last week as investors pared expectations of an interest rate cut. Analysts expect the kiwi to resume its climb following comments made last week by the new governor of the country's central bank, who reaffirmed the bank's focus on inflation.
"Momentum for the kiwi has turned positive after the new governor has shown himself not to be a dove," said Imre Speizer, currency strategist at Westpac, adding that he expected the kiwi to test the mid-$0.8300 region this week. Against the yen, the Antipodeans struggled to make significant progress following a recent run higher as the Bank of Japan's (BoJ) policy meeting loomed.
The Aussie last fetched 82.50 yen, having shed a yen from a two-month peak hit Thursday. Still, it is on track to post a gain of 2 percent this month. Key resistance was found at 83.50, with support at 82.20. A break below 82.10 would target the top of the daily Ichimoku cloud at 81.78.
Likewise, the kiwi was last at 65.46 yen versus 66.18, its highest since late April. This week's first Australian flash point will take place on Tuesday with a speech by Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe. The Aussie last traded at C$1.0340, a whisker away from C$1.0353 struck on Friday. The Australian dollar has gained around 4 percent since it hit C$0.9921, its lowest in more than a year.