SYDNEY/WELLINGTON: The Australian and New Zealand dollars found themselves stuck in a very slim trading range for a third session on Wednesday as caution ahead of major events offshore this week kept investors largely sidelined.
But both Antipodean currencies climbed against their Canadian peer, which came under broad selling pressure on the back of disappointing domestic data.
The kiwi traded at C$0.8927, having hit C$0.8931 overnight, a high not seen since June 2005.
The Aussie broke above trendline resistance to reach a near one-month high of C$0.9623.
Against the US dollar, however, the Aussie has traded between $0.8903 and $0.8929 so far this session, remaining well contained in this week's $0.8894/8983 range. It was last at $0.8919.
The New Zealand dollar was little changed on the day at $0.8277, having pulled back from $0.8306 hit in offshore trade. "In the absence of any major domestic data, they are very much hostage to US dollar sentiment at the moment and the US dollar is very much trading sideways," said Sue Trinh, senior currency strategist at RBC in Hong Kong.
Many investors were reluctant to open new positions ahead of central bank meetings in the European Union and the UK, and always-influential figures on US payrolls later in the week.
RANGE BOUND
For the Aussie, dealers reported buying interest below 89 US cents with good support seen around $0.8890, a level representing the 61.8 percent retracement of its late December to early January rally from $0.8820 to $0.9005.
Offers were seen above the 90 cent mark, which were likely to keep the currency bottled up for now.
Against the yen, the Aussie was steady at 93.42 as its rally from the mid-December trough of 91.13 ran out of steam. The euro stood at A$1.5250, still recovering after last week's break below major technical support at A$1.5278 sent it hurtling to a trough of A$1.5109.
Meanwhile, the kiwi managed to touch an eight-month high of 78.45 versus a currency basket and it hovered near a five-year high around 86.90 yen hit on Monday. It was supported against the Aussie, which was stuck around a five-year trough of NZ$1.0731 hit last month.
The kiwi has been bolstered by expectations that New Zealand's economy will fare better than many other developed countries this year.
The Reserve Bank of New Zealand is widely expected to start raising interest rates as early as March, which would crank up the currency's yield advantage and push it towards $0.8600 in the coming months, analysts say.
In the near term, the kiwi faces technical resistance at $0.8314, the 50 percent retracement of its October-November decline, which has capped it since the start of the week.
Suspected offers above $0.8350 also pose an obstacle, while support lies at $0.8247, its 55-day moving average.
New Zealand government bonds rose slightly, pushing yields as much as 2 basis points lower along the curve. Australian government bond futures were subdued with the three-year bond contract flat at 96.960, while the 10-year contract gained 1.5 ticks to 95.750.
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