Thursday, 15 November 2012 09:40
SYDNEY/WELLINGTON: The Australian and New Zealand dollars were nursing hefty losses against their US counterpart and euro on Thursday, after the US Federal Reserve discussed the need for more bond buying and worries about Greece eased temporarily.
Aussie extends overnight fall to $1.0360 from $1.0372 early, well away from a six-month peak of $1.0480 hit last week. Major support seen at $1.0331, the 38.2 pct of the Sept-Oct decline.
Traders cite stops below $1.0355 and buy orders down to $1.0320.
The kiwi sits around $0.8096, trading between $0.8110 and just above a two-month low of $0.8087 seen overnight. Near term support seen at $0.8076, the 200-day moving average, while $0.8120 seen capping the topside.
US dollar underpinned across the board after minutes from the Fed's October policy meeting showed some board members felt the need to step up asset purchases in 2013.
Also helping the greenback were news of a snap election in Japan, fuelling speculation of more aggressive monetary easing by the Bank of Japan.
All of which gives a boost to the euro across the board. Euro climbs to A$1.2285, having jumped 0.7 pct overnight. Against the kiwi euro at NZ$1.5700.
The euro has snapped a nine-day sequence of lower daily highs on the Aussie, suggesting its fall from the October peak of A$1.2824 may be losing momentum.
Risk currencies also hurt by weakness in Asian shares with Hong Kong and Korea falling more than 1 percent.
Markets watching for an announcement of China's new leadership, expected at 0300 GMT. Aussie and kiwi are sensitive to news out of China, a key export market of Australia and New Zealand.
Data out in Australia showed sales of new motor vehicles slipped in October, taking a breather after two straight months of solid gains as sports utility vehicles snapped their meteoric run.
A raft of data shows New Zealand's current patchy economic period. Manufacturing activity just nudges back into expansion in October after three months of contraction; consumer confidence pushes higher.
Overall the NZ data suggests the economy may have settled after a soft third quarter in which unemployment jumped, and domestic activity, including retail sales, faltered. The Reserve Bank of New Zealand is seen as holding rates at a record low well into next year.
Financial market pricing implies a 30 percent chance of a NZ rate cut next month, a doubling since last week's jobs data.
Australian government bonds edge up, with the three-year contract 0.04 points higher to 97.510, while the 10-year contract rises 0.025 points to 97.045.
New Zealand government bonds a touch higher with yields a couple of ticks lower across the curve.
Copyright Reuters, 2010