The Australian dollar hit a two week-high against a broadly weaker US currency on Wednesday, underpinned by talk of central bank buying, gains in commodity prices and stop-loss buying after technical levels were breached. A media report of a slowdown in Chinese inflation, a day ahead of the official release, was also positive for the currency because such an outcome, if true, would alleviate the need for aggressive monetary tightening in China, a major export market for Australia.
The Australian dollar rose as high as $1.0051, from $0.9981 late in New York, having pierced through its 21-day moving average at $1.0026. It last traded at $1.0044, with immediate resistance at $1.0070, the January 5 high, and support at $0.9962. Meanwhile, the New Zealand dollar also touched two-week highs versus the greenback in thin trade, hitting $0.7758, before settling back to around $0.7754.
The kiwi was unmoved by the results of local dairy giant Fonterra's latest auction, which saw its average price rise 1.2 percent. Near term support for the NZ dollar is seen at $0.7694, the overnight low, while resistance is the January 3 high of $0.7784. The kiwi continued to underperform its neighbour, which has seen the Aussie edge up over the past few sessions from six week-lows. It last traded around $1.2952.
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