WELLINGTON/SYDNEY: The New Zealand dollar gained on Thursday, after the central bank surprisingly reaffirmed its tightening bias, dragging the Aussie higher in its wake. Both currencies were supported after European leaders agreed to boost the region's rescue fund.
The New Zealand dollar up two-thirds of a cent at around $0.8015, after the Reserve Bank of NZ appeared more hawkish than expected and repeated it will start raising rates when conditions allow.
Financial market pricing implies little chance of a rise before the middle of next year, but analysts' opinions are split between a March or June move.
Support seen at $0.7901 and $0.7861, strong resistance at $0.8069.
The RBNZ held rates steady at 2.5 pct as expected.
New Zealand posts its second consecutive monthly trade deficit in September, narrowing the annual surplus as an improving economy boosted demand for imports.
The Aussie nudges up to $1.0429, from $1.0393 in New York.
Reports that euro zone leaders and banks are close to a deal for a 50 pct haircut on Greek debt, as well as stronger Asian equities helping.
Earlier, a draft statement from the EU meeting showed Europe's leaders plan to bump up rescue fund to one trillion euros. Press conference expected at around 0400GMT, according to traders, but has been delayed several times.
Support for the Aussie at $1.0330, then Tuesday's low of $1.0313. Resistance found at the 100-day MA at $1.0434.
Aussie steady against the kiwi at NZ$1.2998 after touching a four-month high of NZ$1.3125 on Tuesday.
NZ government bonds track a fall in US Treasuries with local yields 4.5 basis points higher along the curve.
Australian debt futures also softer, with the three-year contract 0.06 points lower at 96.200 and the 10-year
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