The Australian dollar ticked lower on Thursday as a two-day rally fizzled out in the face of stubborn chart resistance above 77 US cents. The Australian dollar slipped 0.24 percent to $0.7630. It briefly touched a high of $0.7709 on Wednesday after steady inflation figures only reinforced expectations the Reserve Bank of Australia (RBA) would skip a chance to cut rates at its policy meeting next Tuesday.
However, the Aussie was quick to fall back, marking the fifth time since September that it has failed to hold a beachhead at 77 cents. "The fact that the Aussie has collapsed from above 77 US cents in recent months just tells you that rallies are anything but another selling opportunity for traders," said Greg McKenna, chief market strategist at AxiTrader. The Aussie barely moved against the euro or sterling. It fell 0.3 percent on the yen, after rising each day this week.
The New Zealand dollar was largely flat on Thursday, hovering around $0.7155 after the country's trade deficit widened in line with expectations. Thursday's trade data showed a monthly deficit of NZ$1.4 billion. Investors were treading water until next week when a series of data including employment figures and a dairy price auction, should offer fresh momentum.
New Zealand government bonds eased, sending yields 5.5 basis points higher at the long end of the curve. Australian government bond futures were down too, with the three-year bond contract off 1 tick at 98.27. The 10-year contract slipped 5 ticks to 97.7050, led by rising long-term yields in Europe and the United States. Earlier, official data showed a 3.5 percent rise in export prices while import prices fell 1 percent. The ratio of the two, considered a proxy for the terms of trade, posted the biggest increase in almost five years.