SYDNEY/WELLINGTON: The Aussie and New Zealand dollars were on track on Friday to post healthy gains this month, displaying remarkable resilience even as Europe remains a hot spot and markets price in an Australian rate cut next week.
Aussie edges up to $1.0457, from $1.0438 early. Aussie helped by a squeeze in short positions after touching a two-week trough of $1.0328 this week. Local currency looks set to end the month 1.1 pct higher.
Resistance seen around $1.0455/65, ahead of $1.0510 with support around $1.0328.
But expectation of a possible rate cut may limit the momentum, with interbank futures showing a two-in-three chance of a cut in the 3.5 pct cash rate.
NZ dollar rises to two-week highs at $0.8338, from $0.8314 early. The currency has gained nearly 4 percent in September.
Kiwi's near term topside seen at the mid-September high of $0.8354, while support seen solidly at $0.8284.
Kiwi buoyed by fresh selling in the AUD/NZD cross which sinks to five-month lows at NZ$1.2514. A break of NZ$1.2505 would bring it to its lowest in a year.
Antipodeans hold their ground against the euro. Euro at A$1.2360, after slipping to a two-week low of A$1.2320 overnight. Common currency still on track to show 1.4 pct gain this month.
Euro at NZ$1.5520 from a one-month low of NZ$1.5459 offshore, and looks set to post a 1 pct loss this month.
Improved risk climate sees the Aussie at 81.00 yen and kiwi at 64.50 yen, with both crosses close to multi-day highs.
Australian private sector credit rose a touch in August, slowing annual growth to 4.1 pct, a marked change from the double-digit pace of the previous decade.
New Zealand building consents post a third consecutive month of gains on improved demand and further pick up in earthquake rebuild in Canterbury.
Australian government bonds off multi-week highs with the three-year contract down 0.060 points at 97.590.
The 10-year contract eases 0.025 points to 97.006, from a two-month peak of 97.130 on Thursday.
NZ government bonds follow, with yields a tick higher along the curve.
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