Tuesday, 20 November 2012 11:56
SYDNEY/WELLINGTON: The Australian and New Zealand dollars took a breather against their US counterpart on Tuesday, while the euro survived a ratings downgrade of France with sentiment bolstered by hopes of a Greek aid deal later in the session.
The Aussie was steady at $1.0413, having gained 1.3 percent since hitting a three-week trough of $1.0287 Friday.
It fully recovered from a brief dip to $1.0398 after minutes of the Reserve Bank of Australia's (RBA) November meeting showed the bank was still open to rate cuts.
Since May, the RBA has lowered its cash rate by a total of 100 basis points, taking it to a three-year low at 3.25 percent.
The RBA said it felt it was appropriate to leave policy unchanged earlier this month due to a pick-up in inflation at home and a slightly more positive global backdrop.
Markets barely moved after the statement, with interbank futures factoring in a 50-50 chance of a cut in December and swaps pricing in a 60 percent chance of an easing .
"The RBA statement was in line with expectations and there was a bit of positive risk sentiment from Europe and the United States," said Euan McCreadie, a senior dealer at OzForex.
Immediate resistance was seen around $1.0420 and support at $1.0375, ahead of $1.0345 with stops eyed above $1.0425 and sellers ahead of $1.0450.
The New Zealand dollar consolidated at $0.8190, just below a one-week high of $0.8204 touched overnight.
Near term support for the kiwi was seen at $0.8150 and below that the 100-day moving average at 0.8130. Once through $0.8200 the topside was seen facing resistance at $0.8230.
The Antipodeans paused against the euro, following a see-saw session after France's sovereign rating downgrade by Moody's to Aa1 from Aaa.
The euro initially fell across the board, sliding 50 pips to A$1.2253 before it bounced back to where it started the session at A$1.2293.
Traders said investors unwound short euro positions ahead of a European finance ministers meeting later on Tuesday that is likely to give the go-ahead for a Greek aid package.
Such an outcome would be euro-positive, according to OzForex's McCreadie, who saw room for the Aussie to test $1.0450-$1.0480 in the next 24 hours.
Against the kiwi, the euro dipped to a session low of NZ$1.5573 before recovering to last trade at NZ$1.5638.
The Antipodeans were hovering near seven-month highs against a soggy yen as expectations of more stimulus by Japanese authorities kept the low-yielding currency under broad pressure.
The Aussie powered up to a fresh seven-month high of 84.80 yen where it ran into a wall of barriers. A break above 84.80 would open the way to test this year's peak of 88.62 seen in mid-March. It last fetched 84.58.
The kiwi popped up to a near two-week high around 66.76 yen and was last at 66.54.
In New Zealand, a bank survey looking at regional growth suggested the economy came close to stalling in the three months to Sept. 30.
The ANZ Bank survey indicated growth of 0.1 percent for the quarter, and without a pick up in the pace of the rebuild of earthquake-hit Christchurch, it probably would have contracted.
The survey is only a rough guide to third quarter GDP data, which is due in late December.
New Zealand government bonds were softer, which resulted in yields rising as much as 4.5 basis points.
Australian government bond futures ran into profit-taking following recent gains, with the three-year contract last down 0.05 points at 97.410 and the 10-year contract 0.07 points lower at 96.925.
Copyright Reuters, 2012