SYDNEY: The Australian and New Zealand dollars edged higher on Wednesday as progress on a Covid-19 vaccine buoyed US equities, while details of a bumper Aussie bond sale showed strong demand from foreign buyers.
The Aussie added 0.3% to $0.6998 but struggled to break resistance around $0.7020, ahead of the June peak at $0.7069. Support comes in around $0.6965 and $0.6925.
The kiwi dollar firmed 0.2% to $0.6552, though it also faces tough resistance in the $0.6590/0.6600 area. Support lies at $0.6545 and $0.6510.
The Aussie enjoyed a tailwind from Tuesday's huge A$17 billion ($11.87 billion) sale of a new Australian 2025 bond line which drew A$50.6 billion in bids. Details of the offer showed 45% on the debt went to offshore investors, mainly in Asia ex-Japan and the UK. Among the buyers, fund managers took 27%, hedge funds 23% and central banks 8%.
The issue boded well for the sale of a new 2051 bond line due in the week of July 27.
Australian 10-year bond futures firmed 2 ticks to 99.0900, but have had trouble clearing resistance around 99.1500.
The Aussie has been wedded to US stocks in recent weeks as a barometer of risk appetite and moved higher with S&P 500 futures on news Moderna Inc's experimental vaccine for Covid-19 showed early progress.
Domestic events were not so promising, as a survey showed consumer sentiment had been shaken by the lockdown of Melbourne amid a fresh coronavirus outbreak.
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