SYDNEY/WELLINGTON: The Australian and New Zealand dollars were modestly higher across the board on Monday underpinned by encouraging local data, and extended weakness in the euro.
The Aussie drew comfort from a flurry of mostly supportive data, the most important of which was a strong lift in September retail sales, which rose 0.8 percent against expectations of a 0.3 percent rise.
The Aussie gained close to a quarter of a cent after the retail data to $0.9494, before easing back to $0.9480. It had touched a two-week low of $0.9421 on Friday.
Trading was thinned by Tokyo being closed for a holiday. Other Australian data showed house prices rising 1.9 percent, just below forecast, a slight dip in job advertisements, and a benign reading from a private measure of inflation.
The data were not seen altering the outlook for the Reserve Bank of Australia (RBA), which is expected to keep rates steady at 2.5 percent at its monthly policy meeting on Nov. 5, on signs that previous cuts are gaining traction. "Most of the data was above expectations, it's pretty hard for the RBA to ignore that. I don't expect any major change to their statement tomorrow, but clearly rate cuts are much more unlikely in Australia now," said Greg Gibbs, senior currency strategist at RBS in Singapore. Gibbs said the Aussie looks to have more upside.
"You've still got considerable uncertainty around when the Fed changes its policy but interest rate differential favour the Australian dollar at the moment, I think we'll see it grind higher," he said, adding that $0.9600 looked a feasible target. Near term Aussie support is pegged at $0.9410, with the topside seen capped at $0.9530.
Australian bond futures lost further ground, with the three-year bond contract down 0.110 points to 96.820, and the 10-year contract losing 0.080 points to 95.895.
Other Australian economic data due this week includes trade and employment, while the RBA releases its quarterly outlook for the economy on Friday.
The New Zealand dollar was also firmer, pushing up to a high of $0.8288 against a low of $0.8231 late in New York on Friday.
Near term support is seen at $0.8240 and below that the 200-day moving average of $0.8180 with resistance at $0.8315.
Data showed the prices for New Zealand's main export commodities rose 1.3 percent last month, although a rise in the currency dented returns.
The Antipodeans notched modest gains on the cross rates, notably against the struggling euro and the yen.
The euro was down 0.4 percent to A$1.4428 from A$1.4309 on Friday, while the Aussie was up 0.6 percent to 70.27 , a 10-day high.
The kiwi's gains on the cross rates were less pronounced, and Aussie's outperformance was reflected in its 0.4 percent gain to NZ$1.1452.
New Zealand government bond prices were softer, sending yields 5 basis points higher along the curve.
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