WELLINGTON/SYDNEY: The New Zealand dollars powered higher on Tuesday as risk appetite improved with stronger equities and more signs of recovery in the domestic economy. The Aussie held onto hefty overnight gains.
Kiwi on fire, spiking to a one-month peak of $0.8529, from $0.8460 in New York, with some stop-loss buying triggered above $0.8510. It last traded around $0.8522.
Major resistance at $0.8576, the Aug 3 low with support at $0.8365.
Kiwi underpinned by a 13 pct jump in NZ home building approvals, adding to evidence of an improving domestic economy.
Australian home building approvals lag far behind with just a 1 pct rise in July, versus the median forecast for a 2 pct increase
Aussie lost almost a cent on the kiwi to trade at NZ$1.2515 .
Kiwi had already been boosted overnight following a risk asset rally on encouraging US data and European news that seemed to have soothed recession fears for now.
Market pricing still sitting around 20 pct for a 25 bps hike from the RBNZ next month, and 52 bps of tightening over the next 12 months
Kiwi also gains on the crosses, holding around a four-week high of NZ$1.7021 on the euro. It is hovering around a three week high of 65.51 yen and up 1 pct on the Swissy at 0.6975 francs .
It also outperforms the Aussie at NZ$1.2515 .
Australian dollar hovers around four-week highs at $0.0672, from $1.0655 in New York, having climbed as high as $1.0686 earlier in the session.
Traders say the Aussie could be heading higher with resistance found at the base of the ascending ichimoku cloud at $1.0680 with the top of the cloud not far behind at $1.0722. Support seen at the 100-day MA at $1.0646 with solid hourly support at $1.0605/10.
Aussie holds onto multi-week gains on yen and Swissy. Euro has eased 6 cents to A$1.3603 in 3 weeks when the single currency struck a five-month peak.
Australian bond futures also lower, with the 3-year contract off 0.03 points off at 96.100 and the 10-year down 0.03 points at 95.555.
Copyright Reuters, 2011
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