Wednesday, 28 November 2012 09:49
WELLINGTON/SYDNEY: The Australian and New Zealand dollars marked time near multi-week highs against their US counterpart on Wednesday, with investors awaiting more details on a Greek debt plan and progress on US budget talks.
The Aussie steady at $1.0443, near a two-month peak of $1.0491 set Tuesday and within sight of $1.0625, the September peak.
A break above would bring it to its highest since March. For now immediate resistance is seen at $1.0500, with near-term support at $1.0425.
NZ dollar quiet around $0.8205, from late Tuesday's $0.8226 and not far from a three-week peak of $0.8250 hit last week. Initial support seen at $0.8180, with first hurdle at $0.8240, a Tuesday's high.
Antipodeans subdued on rising concern over minimal progress in US budget talks and lack of details over a Greek debt plan announced Tuesday.
Not helping is a slowdown in the pipeline of investments committed to Australian resource projects amid recent declines in commodity prices. The pipeline still amounts near a healthy A$200 bln, much of it in LNG, gas and petroleum projects.
Data out in Australia showed a 1.7 pct rise in construction done in Q3, vs forecasts of a 2.7 pct increase. The reading will feed into Q3 GDP to be released next week.
Markets remain divided on the Reserve Bank of Australia's next move when it holds its monthly policy meeting on Tuesday. Interbank futures pricing implies a 50-50 pct chance of a cut by 25 bps to a historical low of 3.0 pct, while swap markets are factoring in a 62 pct chance of an easing.
The Antipodeans edge lower on the yen, on profit taking following recent hefty gains. The Aussie fetching 85.72 yen, having hit 86.42 on Monday, its highest in eight months. The kiwi eases to 67.35 yen from a peak of 68.08, its strongest since early April.
Kiwi unmoved after NZ's central bank says high currency has affected the country's manufacturing sector.
Focus on next Thursday's rate review, with analysts expecting no change in record low rate of 2.5 pct while markets pricing sees a 14 pct chance of a 25-bps rate cut.
OECD trims its assessment of Australian and New Zealand economies, pulling back GDP forecasts for both countries in its semi-annual outlook.
NZ government bonds firmer, pushing yields three ticks lower along the curve.
Australian government bond futures push higher, with the three-year contract up 0.05 points at 97.320, and the 10-year contract 0.07 points higher at 96.860.
Copyright Reuters, 2012