WELLINGTON/SYDNEY: The Australian and New Zealand dollars held steady in early trade on Wednesday after Greek's government won a vote of no confidence, paving the way for a more important vote on austerity measures next week.
The Australian dollar sat on offshore gains around $1.0600 with the move modest as the market had already priced in a victory for Papandreou.
Indeed, after popping higher the euro quickly ran into profit-taking, a classic buy on the rumour sell on the fact response.
The Aussie had traded $1.0557 to $1.0620, with support seen from $1.0532 and strong resistance at $1.0617.
The New Zealand dollar was at $0.8115, from $0.8105 late on Wednesday, after ranging from $0.8104 to $0.8146 in offshore trade.
Support for the kiwi starts at $0.8045, with resistance at $0.8147.
The antipodean pair tracked the euro higher through the offshore session, as markets bet that the Greek government would survive the no-confidence vote and be able to institute the necessary measures to avoid a default. For more see
Wall Street stocks, a proxy for risk appetite, gained for the fourth-straight day, with the tech-heavy Nasdaq up 2.2 percent.
Volume in markets was light as traders were reluctant to take big bets with yet more Greek votes to come, while oil prices eased and safe-haven gold rose.
Adding to the cautious move was the two-day Fed meeting which started on Tuesday, with the market waiting to see what its policy statement will say about the slowing economy.
New Zealand sees first quarter balance of payments data due. Expectations for a huge surplus were erased after Statistics New Zealand said it would change the treatment of reinsurance payments received after the Christchurch earthquake.
NZ government debt prices eased across the curve, with yields a tick higher, as U.S. Treasuries were in a holding pattern until after the Fed.
Australian bond futures also lower, with the three-year contract down 0.03 points to 95.310 and the ten-year contract 0.035 points lower to 94.870.
Copyright Reuters, 2011
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