Aussie, New Zealand dollars steadier on Greece

WELLINGTON/SYDNEY: The Australian and New Zealand dollars bounced from multi-week lows on Tuesday as markets dared to hope for a positive outcome in Greece while global equities rallied.

The Aussie around $1.0441, after hitting $1.0390 offshore, the lowest since mid-April. The currency was in part undermined by selling against a firmer euro.

Aussie may now target $1.0250 after bursting through the $1.0400 level. It has fallen more than 5 percent from a 29-year peak of $1.1012 set on May 2.

NZ dollar tracking the Aussie down to $0.8009 overnight, before crawling back to $0.8057 in early trade. Kiwi has fallen over the past week on worries over a possible delay in Christchurch rebuilding because of ongoing aftershocks.

While markets have pushed back NZ rate hike to early next year , Australian interbank futures imply a better than evens chance of a quarter-point rate cut by year-end, up from a one-in-three chance last week.

On the cross, the Aussie softer at NZ$1.2957 from NZ$1.2970, but well above Friday's low of NZ$1.2851.

Euro higher at around $1.4286 on bets Greece's parliament will this week approve an austerity package to get emergency aid and avoid defaulting on its debt.

Global equities also bounced back on less onerous capital rules than feared for banks from global regulator. Commodities market mixed, with the CRB index down 0.4 percent, gold and copper down while oil prices rising.

Mood also helped by China's support for the euro and progress in a French plan for banks to rollover their Greek debt.

In Australia the major event is a speech by Reserve Bank of Australia (RBA) Assistant Governor Guy Debelle on "Collateral, Funding and Liquidity" at 0100 GMT.

No major data due in Australia this week, while NZ expects building and business confidence surveys. On Monday, data showed the country posted a smaller annual trade surplus in May.

NZ bond yields follow US Treasury higher, with local yields up around 2 bps. Benchmark 10-year Treasury yields rising to 2.93 pct from 2.87 pct on Friday.

Australian bond futures lower with the three-year down 0.06 points at 95.420 and the 10-year contract 0.075 points lower at 94.925.

Copyright Reuters, 2011