SYDNEY/WELLINGTON: The Australian and New Zealand dollars were lower against the US dollar on Wednesday as a mix of soft data and profit taking knocked the commodity currencies off recent highs.
The Aussie was around $0.9232 from $0.9246 in late New York trade, after it had scaled a four-and-a-half month high of $0.9310 on Tuesday in the aftermath of the Reserve Bank of Australia's (RBA) monthly policy review.
The central bank, as expected, held rates at 2.5 percent, and suggested it was likely to be on hold for some months, while it had little new to say on the exchange rate.
It ebbed a little further to a low of $0.9223 after data showed a 5 percent fall in building approvals in February, twice market expectations.
"The Aussie is marginally lower because of the soft building approval data but the fact that the market didn't really care that the RBA changed the rhetoric slightly around the Aussie tells you that the Aussie is going up," said Geoff Kendrick, a research executive director at Morgan Stanley in Hong Kong.
The Aussie's decline was cushioned by a 0.3 percent gain against the kiwi to a one-month high of NZ$1.0746, and its revisiting of a near 10-month peak versus the yen at 95.97 yen.
The New Zealand dollar fell to a one-week low of $0.8590, after it had hit a two-and-a-half year high of $0.8702 overnight, as it mirrored a decline in the Aussie and a weak dairy auction offered a pretext to book profits. It last traded at $0.8600.
"The dairy auction was quite negative and that's taken the edge off kiwi which had pushed to high levels," said Bank of New Zealand currency strategist Raiko Shareef.
"The kiwi has been driven by high commodity prices for the past six months or so, and if there are signs that story is starting to unwind, that's definitely an excuse to take profit."
Earlier on Wednesday, the latest global dairy auction held by Fonterra showed an 8.9 percent fall in prices, the fourth consecutive fall, while volumes rose.
The ANZ Bank's latest New Zealand commodity price index for March eased fractionally from a record high as a fall in dairy prices offset gains for meat, seafood, and forest products. Against the greenback, near-term support for the kiwi was at $0.8590/00, with resistance at $0.8650 ahead of a solid barrier at the overnight high of $0.8702.
On the cross rates, the New Zealand dollar was softer across the board, sending its trade weighted index against a basket of currencies down 0.8 percent, after hitting a post-float high last week.
New Zealand government bonds were trading with a soft tone, with yields up to 7.5 basis points higher.
Australian government bond futures eased, with the three-year bond contract down 5 ticks to 96.870, and the 10-year contract 4.5 points to 95.815.
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