Aussie & New Zealand dollars consolidate strength after Greece rally

WELLINGTON/SYDNEY: The Australian and New Zealand dollars started a touch softer on Friday, with the currencies taking a breather from a Greece-inspired relief rally after the country escaped from a near bankruptcy.

The Aussie around $1.0720, from $1.0730 in New York and a Sydney high of $1.0751, best in nearly four weeks.

After the impressive rebound from Monday's low of $1.0390, Aussie has broken out of a wedge formation in the charts, easing the threat of a downside test as signalled by a recent bearish trend of lower highs and lower lows.

Near-term resistance around $1.0775, the June peak and also the 61.8 percent retracement of the May 2-June 27 decline, with minor support around $1.0697.

New Zealand dollar also subdued in overnight trading, holding around $0.8286, after hitting a post-float high of $0.8320 on Thursday.

In addition to a Greece-induced markets rally, kiwi also helped by a raft of generally positive data, pointing to better outlook. Markets now price in around 64 bps of tightening over the next 12 months.

The Aussie/kiwi pair still trapped in a tight range, holding around New Zealand dollar 1.2930.

Global stocks up to their highest level in a month, while risk currencies and commodities consolidated gains, after Greece approved the final austerity measures needed to secure funding and avert bankruptcy.

Euro higher on the US dollar, while the CRB commodity index eased 0.2 percent. A jump in business activity in the US Midwest also eased fears of an economic slowdown.

Against the battered sterling, the Antipodeans hold near 26 year peaks, with the Aussie hovering at A$1.4964 and the kiwi around NZ$1.9356 . The pound has come under pressure since the Bank of England policymakers recently flagged the possibility of more monetary easing.

PMI and home sales data due in Australia, while no data release is expected in New Zealand.

New Zealand NZ bond yields track gains in US Treasury yields, with local yields up to 5 bps higher, on waning appetite for safety after Greece approved austerity measures.

Australian bond futures likewise hit with the three-year down 0.06 points at 95.160 and the 10-year contract also 0.06 points lower at 94.725.

Copyright Reuters, 2011