Aussie & NZ dollars off multi-month peaks, await data

WELLINGTON/SYDNEY: The Australian and New Zealand dollars backed off multi-month highs on Thursday ahead of key local
08 Feb, 2012

* The Aussie stays firm around $1.0784, having reached a six-month peak of $1.0845 overnight. It has been well bid since the Reserve Bank of Australia surprised on Tuesday by holding rates steady at 4.25 pct, dashing market bets of a 25 bps cut.

* The Aussie, which is up more than 5 percent so far this year, is looking tired and running out of puff, but still well supported. Support seen at $1.0749 and below that $1.0700, with resistance at $1.0867, the August 2011 high. Bulls targeting the 30-year peak of $1.1081 hit in late July 2011.

* The New Zealand dollar at $0.8353, unchanged from Wednesday's late local level, but it hit a five-month high of $0.8408 overnight, before pulling back.

* The kiwi, like the Aussie also looking stretched and near term outlook may depend on jobs data due later in the day. Currency seen supported at $0.8326 with initial resistance at $0.8380 and then $0.8400.

* NZ Q4 unemployment data due, with Reuters poll expecting a 0.4 percent increase in employment to bring the jobless rate to 6.5 percent, from 6.6 percent in the third quarter.

* A strong number could see the kiwi test the upside, and likewise a disappointment will see it dip briefly.

* NZ Finance Minister reaffirms the government's intention to get back to a modest budget surplus by 2014/15, although he admits it will be challenging and European debt crisis is a headwind, which could yet derail recovery.

* Also due Thursday are figures on Chinese inflation. The CPI is seen up 1 pct in January, keeping the annual rate at 4.1 pct. Food inflation tends to be biased up by the Lunar holiday and the trend is still lower overall.

* A broadly stronger euro hits a two-month high against greenback in choppy trading, with investors awaiting confirmation that a deal on a second bailout package for Greece has been agreed and backed by Greek political leaders, avoiding a chaotic default.

* The euro hits a seven-week high against the yen, with the US dollar also up 0.3 percent against the yen, with a sharp contraction in Japan's current account surplus to a 15-year low weighing.

* Euro bounces off all-time lows on the Antipodean currencies, edging up to around NZ$1.5871, against a record low NZ$1.5627 hit earlier this week. Against the Aussie euro at A$1.2285 off a low of A$1.2124.

* The South Pacific pair held near multi-month peaks against the yen with the Aussie at 83.09 yen, and the kiwi at 64.26.

* The Aussie/kiwi pair was steady around NZ$1.2913, pulling back from a one-week high around NZ$1.2961 hit on Wednesday after the RBA rate decision.

* New Zealand government bonds open with slight offered tone, sending yields a tick higher along the curve.

* Australian bond futures flat with the three-year contract steady at 96.480. The 10-year contract edges up 0.015 points to 95.975.

Copyright Reuters, 2012

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