The Australian and New Zealand dollars broadly held onto overnight gains on Friday, though they remained vulnerable to waves of market panic, particularly as worries about the eurozone financial sector persisted. The Aussie last traded at $1.0285, down from $1.0324 late in New York, but still well off a five-month trough around $0.9224 set earlier in the week.
The NZ dollar was last at $0.8224 versus $0.8295 in New York. It hit an early high of $0.8335, but failed to break through strong resistance in the $0.8325/35 area. Support is now seen around $0.8190. It has been a wild start to the month for the high-flying kiwi, which hit a 30-year peak of $0.8842 on August 1 only to fall 6.4 percent following the global turbulence.
The Aussie stood at 0.7787 francs, having surged a whopping 6.6 percent offshore to a high around 0.7900, while the kiwi climbed more than 7 percent and was last at 0.6228. Interbank futures pared chances of deep rate cuts, but were still fully priced for a 25 bps easing in September. They are priced for a rate of 3.59 percent by year end, compared with the current 4.75 percent cash rate.
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