WELLINGTON/SYDNEY: The Australian and New Zealand dollars consolidated hefty monthly gains and sat near multi-week highs on Monday, ahead of a busy week including a possible first cut in Australian interest rates in two-and-a-half years.
Investors focused on RBA policy meeting on Tuesday and quarterly monetary statement on Friday, with a majority of analysts expecting the central bank will cut rates by 25 basis points to 4.5 percent.
The interbank market implies around an 82 percent chance of an easing to 4.5 pct this week.
Aussie on course for a monthly gain of 10.6 pct, which would be the second biggest monthly increase on record, as it reverses all of September's slump.
Aussie nudges lower to $1.0685 , from $1.0713 on Friday in New York. Still, it is within striking distance of a two-month high at $1.0753 touched last week. Resistance seen at $1.0765.
Dips may continue to find support at $1.064-50. Traders say a US investment bank was a keen seller from just above $1.0700 to $1.0670, with buyers lined up ahead of $1.0655.
Persistent talk of decent buying flows that will hit the market around the time of the London fix as funds rebalance their forex exposure after huge moves in stocks this month.
The New Zealand dollar hovering around $0.8200, after last Friday's six-week high of $0.8242. It is on target for a monthly gain of 7.9 percent, which would be the largest since May 2009, following a near 11 percent loss in September.
Support at $0.8166 and then $0.8110, with $0.8242 the first hurdle higher ahead of $0.8290.
The Aussie trims gains against the kiwi at NZ$1.3000 from early levels around NZ$1.3047. Last week it hit a 4-1/2 month high of NZ$1.3125.
Speculators increase net long positions for Aussie and kiwi, but cut US dollar long bets to the lowest in six weeks. See
Against the yet, Aussie retreats a to 80.77 yen , after touching a near two-month high of 81.61 last week. The kiwi last stood at 62.00 yen with markets wary of possible Japanese government intervention. Earlier on Monday USD touched a record low against the yen in thin trade.
Australia has house prices, building approvals and retail sales data this week.
This week sees NZ third quarter labour market data, which is expected to show a modest lift in wages and jobs, but little improvement on the 6.5 percent jobless rate.
NZ new home building consents slumped 17.1 percent in September on month before, the first fall in three months, and pointing to wind going out of NZ's economic sails.
Lots of other major events this week with the Federal Reserve meeting Tuesday and Wednesday and the ECB on Thursday. The G20 meets late in the week while US payrolls loom on Friday.
New Zealand government bond prices a touch firmer with yields down 1.5 basis points along the curve.
Australian debt futures extend gains, with the three-year contract 0.05 points higher at 96.09 and the 10-year
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