Thursday, 29 November 2012 09:47
WELLINGTON/SYDNEY: The Australian and New Zealand dollars held near multi-week highs on Thursday as risk sentiment improved on hopes that progress is being made that will avoid a US fiscal crisis, but investors remained generally cautious.
The Aussie drifts lower to $1.0458 vs $1.0474 early, but still close to Tuesday's two-month peak of $1.0491.
Immediate support for the Aussie seen at $1.0425, with solid resistance around $1.0490/1.0500.
Australian business investment rose a solid 2.8 pct in Q3, beating forecasts of an increase of 2 pct, as mines continued to spend heavily on construction. The reading underpins expectations of another quarter of brisk economic growth.
Planned spending for 2012/13 was revised down to A$173.4 billion from A$181.5 billion, but still pointed to a massive pipeline of mining investment despite recent decisions to delay some projects.
Markets focus on the lower estimate and slightly widen the odds of an interest rate cut next week. Interbank futures price a 62 pct chance of a quarter point cut in the cash rate to a historical low of 3.0 pct, from 54 pct before the data. Swap markets put a 69 percent chance.
The NZ dollar steady around $0.8242 from $0.8235 early, and close to a three-week peak of $0.8250 hit last week.
NZ business confidence picks up in November with firms more optimistic about their own prospects, a monthly ANZ survey showed.
Initial kiwi support remains around $0.8200, the 50-DMA, with resistance still at $0.8250 and more solidly at $0.8288, the trendline of August to early November highs.
The Antipodeans stays firm against the yen, with the Aussie at 85.89 yen, within striking distance of a Monday's near eight-month peaks peak of 86.42.
Kiwi at 67.69 yen, having touched 68.08 on Monday, the highest since early April.
Market sentiment remains fragile amid uncertainties around budget talks in the United States and Greece's latest bailout plan.
Australian bond futures a hint firmer, with the three-year contract up 0.02 points to 97.360, and the 10-year contract also up 0.02 points to 96.885.
New Zealand government bonds reverse opening bid tone and turn softer, with yields a tick higher along the curve.
Copyright Reuters, 2012