SYDNEY: The Aussie dollar edged higher on Friday as markets trimmed the risk of deep interest rate cuts following cautiously upbeat comments from Australia's top central banker, while the New Zealand currency drifted higher as well.
The Aussie dollar is last up half a cent at $1.0480, having hit a session high of $1.0503. Major resistance seen at $1.0535, with support pegged at the overnight low of $1.0419.
Reserve Bank of Australia (RBA) Governor Glenn Stevens told Parliament the nation was well positioned to tackle any further global weakness, but gave no hint of cutting rates.
Interbank futures fell , although markets are still pricing in the risk of up to 100 bps worth of cuts by year-end. Earlier in the month, the market had discounted about 150 bps of easings by December.
RBA left cash rate on hold at 4.75 pct early August due to heightened global uncertainty, but said it had considered tightening.
Tracking the Aussie, the kiwi rises a third of a cent to $0.8310. But sentiment is still cautious ahead of Bernanke's speech. Resistance is seen around $0.8368 and support at $0.8259.
Kiwi failed to sustain brief gains on Thursday in the wake of surprisingly upbeat NZ retail sales data .
Markets still see little chance of a rate hike next month due to the uncertain global outlook, but pricing over the next 12 months inches higher to 50 bps from 44 bps last week.
Against the kiwi, the Aussie firms to NZ$1.2610 from NZ$1.2593, well off a one-year trough of NZ$1.2305 struck earlier in August.
The Antipodeans also advance on yen, Swiss franc and euro.
NZ government bonds firmer across the curve, with local yields up to two ticks lower.
Australian bond futures mixed, with the 3-year contract 0.03 point lower at 96.150 and the 10-year up 0.015 points at 95.585.
Copyright Reuters, 2011
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