Aussie, New Zealand dollars eye highs as risk back in favour

WELLINGTON/SYDNEY: The Australian and New Zealand dollars started on a firm footing on Monday as solid US data and a temporary patch for Greece's debt problems heartened investors to be more confident about risk.

The Aussie dollar starts the week around $1.0770 compared with Friday's late local level of $1.0711. It ranged between $1.680 and $1.0790 in the offshore session.

The currency was one of the top performers on Friday and gained 2 percent last week after it had hit an 11-week trough around $1.0390.

Immediate support is seen at $1.0668, the June 30 low, with resistance at $1.08013. The Aussie's strong recovery from an 11-week low points to a firm base being established with ahead of another go at the 29-year peak of $1.1012 set in early May.

The New Zealand dollar was around $0.8270, from Friday's $0.8264. It ranged $0.8240 to $0.8286 in Friday's offshore session and is poised for another possible assault on last week's 26-year, post-float high of $0.8320.

Near term support for the kiwi is seen at $0.8240, with the psychological $0.8300 level the first hurdle higher ahead of the post-float.

The Aussie/kiwi pair firmer at NZ$1.30002, as the Aussie outperforms.

Euro has its best week since January after the resolution of the Greek debt crisis, for now. A relief rally and the prospect of a rate rise this week by the European Central Bank bolster sentiment in the single currency and may see the building of long euro positions.

In addition to the ECB meeting, markets will be looking to a slew of US data including the key non-farm payrolls numbers. Sentiment was lifted on Friday by data showing better than expected manufacturing activity.

The data calendar on both sides of the Tasman fills up this week, offering potential local drivers for markets.

Australia has a flurry of releases, notably the Reserve Bank of Australia's latest rate pronouncement on Tuesday, with no change to the 4.75 percent rate seen.

Other data include retail sales, jobs and trade, as well as a speech by a senior RBA official.

New Zealand has the influential Institute of Economic Research's quarterly business survey, which is expected to show a rebound in sentiment as other recent surveys.

New Zealand also has a belated look at first quarter gross domestic product, which is expected to show a rise of 0.4 percent growth on the previous quarter. See

New Zealand debt opens on the back foot as the safety demand eases and local yields push a couple of ticks higher along the curve.

Australian bond futures mixed. Three-year contract eases 0.01 points to 95.130 but the 10-year adds 0.015 points to 94.730.

Copyright Reuters, 2011