WELLINGTON/SYDNEY: The Australian and New Zealand dollars opened strongly on Monday, with the kiwi within sight of a three-year high, however the currencies could be weighed on by news of further policy tightening in China.
Risk appetite remained strong on Friday, driven by improving consumer confidence and tame core inflation data in the U.S., which pushed stocks and commodity prices higher.
The New Zealand dollar broke through resistance at the November high of $0.7976 to briefly touch $0.80 for the first since April 2008. The kiwi was last at $0.7990.
The base for the kiwi is now $0.7910, with the first topside hurdle at $0.8034, the high from April 23, 2008.
Australian dollar around $1.0555, after reaching $1.0579 in late New York trade on Friday, within a whisker of the post-float high of $1.0585 struck on April 8.
Support for the Aussie starts at $1.0455, with resistance at the 29-year high of $1.0585.
On Sunday China raised banks' required reserves for the fourth time this year, its latest shot in the battle against stubbornly-high inflation, a move which could weigh on the Aussie in particular.
The U.S. dollar remains sluggish, with the inflation data on Friday indicating rates may not be raised this year, while in contrast the ECB is expected to hike again before the end of 2011.
New Zealand sees first quarter inflation data due on Monday, which is expected to see the annual CPI rise to 4.6 percent on higher fuel and food costs and a rise in sales tax.
However the central bank is expected to be unswayed by the temporary spike. Finance Minister Bill English saying longer term inflation was well in hand and the economy is on the mend.
New Zealand also has the results of Fonterra's latest dairy auction on Wednesday, and ANZ consumer confidence on Thursday.
Australia has minutes from the central bank's April policy meeting on Tuesday, with import/export prices and producer prices also due this week.
New Zealand government debt prices a touch weaker, as U.S. Treasuries were seen poised for a rally on the back of economic growth and benign inflation. Australian bond futures inch upward, with the three-year contract up 0.01 point to 94.810 and the ten-year contract also one basis point higher at 94.410.
Comments
Comments are closed.