WELLINGTON: The Australian and New Zealand dollars were sitting lower in subdued trading on Tuesday as the US dollar regained some of the ground lost after last week's softer than expected jobs numbers.
The Australian dollar was at $0.8635, having been knocked from its overnight high of $0.8683 as investors saw the non-farm payrolls data as pointing to a bright US economic outlook and took the opportunity to rebuild long positions.
"The market has been taking back some of the over reaction after Friday night, traders were disappointed but it wasn't a bad (payrolls) report, so we're almost on a positive US dollar trend, but not quite," said Westpac senior strategist Imre Speizer.
Some US markets will be closed on Tuesday for the Veterans Day holiday, leaving traders to mark time, but with the Antipodeans looking vulnerable.
"As long as the Aussie stays under $0.8650 then the downtrend is intact and the outlook more bearish," Speizer said.
The currency had a slight lift after data showed a record jump in the National Australia Bank's survey of business conditions in October to its highest level since early 2008.
The survey details were consistent with the Reserve Bank of Australia keeping its cash rate at 2.5 percent well into next year.
The New Zealand dollar was sitting at $0.7757, after it too had been knocked off its overnight high - $0.7823 - by the improved US dollar sentiment.
"The kiwi downtrend has been interrupted, and we'll probably need a couple more days of kiwi declines, below $0.7700, to say the downtrend has resumed," Speizer said. Near-term support for the kiwi is seen at $0.7700 and below that the year low of $0.7660, with $0.7820 likely capping the topside.
The Reserve Bank of New Zealand (RBNZ) issues its six-monthly fiscal responsibility report on Wednesday at which it is expected to update on the future of the restrictions on banks' low deposit home lending imposed last year.
New Zealand government bonds were trading with an offered tone, sending yields as much as 3.5 basis points higher.
Australian government bond futures eased, with the three-year bond contract down 2 ticks at 97.420. The 10-year contract fell 3.5 points to 96.665.
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