WELLINGTON/SYDNEY: The Australian and New Zealand dollars traded sideways on Tuesday, ahead of a possible first cut in Australian interest rates in two-and-a-half years.
Aussie steady at $1.0525 from $1.0521 in New York, having slid 1.5 pct on Monday after Japan intervened to sell massive amounts of yen for US dollars--talk of as much as 10 trillion yen. This lifted the US currency across the board.
It briefly touched a session low of $1.0498 after a soft China official PMI reading, which revived concerns about the pace of China's economic slowdown.
Given China is the biggest buyer of Australian commodities, the soft number pushed the Aussie down around half a cent, before it found support.
Market focused on the outcome of the Reserve Bank of Australia's (RBA) policy meeting at 0330 GMT which could well deliver the first cut in rates since April 2009 and add pressure on the Aussie.
Interbank market implies around an 80 percent chance of a 25 bps easing to 4.5 pc. A Reuters poll found 12 of 19 analysts looked for a cut .
Domestic data showed another round of soft house prices, down 1.2 pct in the quarter, while new home sales were the lowest in a decade.
Support for the Aussie, which gained 9 pct in October in its second biggest monthly increase on record, found at around $1.0500. A break below targets the 100-day MA around $1.0435. Resistance at $1.0640.
The New Zealand dollar edges up to $0.8080, from $0.0859 in New York.
Kiwi gained 6.2 percent in October, best since May 2009. Near term support kicks in at $0.8050 below that $0.8010, with $0.8140 the first hurdle higher.
The Antipodeans retreat against the yen from the post-intervention highs, with Aussie down 0.2 percent to 82.19 yen from offshore peak of nearly 84 yen.
Kiwi at 63.44 yen from 63.14 yen from a high of 64.51 yen. Investors wary of further intervention to sell yen by authorities.
Against the kiwi, the Aussie softer at NZ$1.3008 from NZ$1.3055 , having hit a 4-1/2 month high of NZ$1.3125 last week.
New Zealand wages data shows subdued growth of 0.5 percent for third-quarter and 2 percent for the year, while labour market indicators suggest a flat jobs market. All of which backs rates on hold well into 2012. For details
NZ employment numbers on Thursday with the jobless rate forecast at 6.4 percent, from 6.5 percent.
New Zealand government bond prices slightly extend opening gains, as yields dip 4.5 basis points.
Australian debt futures gain, with the three-year contract 0.08 points higher at 96.180 and the 10-year up 0.075 points at 95.535.
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