WELLINGTON/SYDNEY: The Australian and New Zealand dollars rallied to one-month highs against a depressed euro on Friday and edged up on the dollar after markets reacted coolly to President Barack Obama's ambitious $447 billion job package.
The euro fell across the board after the European Central Bank seemed in no rush to resume its policy tightening, citing low growth forecasts.
The single currency, last at A$1.3102, sank as low as A$1.3090, having crashed through a series of support levels. It looked set to test the July trough of A$1.2922, ahead of an all-time low of A$1.2910 struck in December.
Against the kiwi, the euro dived to around NZ$1.6620, nearing NZ$1.6560, the 76.4 percent retracement of the move from NZ$1.6186 to NZ$1.7770. It last traded at NZ$1.6648.
"The Aussie-euro seems well supported as long as the euro zone problems persist," said David Scutt, trader at Arab Bank Australia.
The euro has been under pressure as Europe is still struggling to convince markets it has the political will needed to tackle its debt problems.
On the week, it fell nearly 2 percent against the Aussie and was down about 0.7 percent on the kiwi.
Against the greenback, the Antipodeans rose around 0.4 percent on the day after Obama's jobs plan to stimulate a sluggish economy failed to give the US dollar a boost. .
The Aussie climbed to a high around $1.0635 from $1.0575 in early trade. Initial support is seen at $1.0566 and below that $1.0530, with major resistance at $1.0700.
Talk of global mining giant BHP Billiton in the market for around A$2.5 billion at the London fix to pay dividends, further underpinned the Aussie.
A raft of Chinese data, which came in line with expectations, also lend support to the Antipodeans. Consumer price data soothed fears over inflationary pressures building in the world's No.2 economy.
The local currency had come under heavy pressure this week due to global market volatility and following surprisingly weak jobs numbers at home. Still, it remained remarkably resilient and is 0.2 percent higher for the week.
NEW ZEALAND DOLLAR
The New Zealand dollar edged up to $0.8351 from $0.8309 in New York. Support is found at around $0.8285, but the kiwi is likely to struggle heading into $0.8400, traders said.
"The Aussie and kiwi should be commended for their stoicism but the broader atmospherics remain decidedly risk averse," said Westpac senior strategist Imre Speizer.
The Aussie crawled back to NZ$1.2714 from NZ$1.2697 in New York, but still off a two-month high of NZ$1.2831 set Wednesday.
The kiwi was not helped by more sluggish data, with electronic retail card sales down 0.7 percent in August, the first decline in three months. That followed a 11.6 percent drop in residential building work volumes on Thursday.
Next week's highlight will be on the Reserve Bank of New Zealand's rate review. Analysts expect the central bank to hold rates steady due to global uncertainty, which will more likely overshadow the need to start raising rates to choke off inflation pressures.
Market pricing implies an 11 percent chance of a 25 bps rate rise next week, with around 38 bps worth of tightening over the next 12 months.
The New Zealand government bonds were softer, with local yields around 1 basis point higher. Australian bond futures were also a touch weaker, with the three-year contract off 0.04 points at 96.260, and the 10-year down 0.01 point at 95.730.
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