Aussie, NZ dollar edge lower, lacking conviction

WELLINGTON/SYDNEY: The Australian and New Zealand dollars edged lower on Monday as investors reacted cautiously to the latest EU fiscal union agreement to tackle the region's debt woes.

The Aussie softer at $1.0174, vs $1.0211 on Friday in New York, having dropped to 10-day lows of $1.0048 at one point offshore.

Aussie seen consolidating after falling 1.2 pct last week. Support at $1.0105, while $1.0233 set to cap the topside.

The kiwi at $0.7720 vs $0.7750 in New York, having reached a 10-day trough of $0.7636 offshore.

Support for the kiwi around $0.7725 and below that $0.7700 with $0.7760/70 set to be resistance.

Asian investors yet to be convinced recent EU fiscal union plan will allay concerns about the region's debt crisis. What they would really like to see is far more support from ECB to buy bonds from heavily indebted countries, traders say.

Antipodeans also on defensive against yen and euro, but off 10-day troughs struck on Friday.

Against the kiwi, the Aussie dead-calm at NZ$1.3170 . It has been stuck in a tight range of NZ$1.3069-$1.3243 since Nov 21.

Australian trade surplus narrowed to a three-month low of A$1.60 bln, well below forecast of A$1.90 bln, and housing finance rose a further 0.7 pct over the month, beating expectations of a flat result.

China's annual growth likely to slow to 8.5 pct in 2012, according to an academic adviser to the country's central bank Still a healthy number that should support Australia and New Zealand's economies.

Chinese data showed strong imports from Australia, up 37 pct on the year, giving China a $4.9 bln deficit vs Australia.

In New Zealand, markets pricing still implying 20 pct chance of a 25 bps rate cut next month, and 4 bps next year.

NZ's diary light with only food prices and manufacturing survey (PMI) the only items of note, ahead of GDP and current account data next week.

NZ government bonds a touch softer sending yields a tick higher along the curve.

Aussie debt futures ease with the three-year contract down 0.04 points to 96.875, and the 10-year contract off 0.045 points to 96.115.