Aussie extends gains on USD & euro, NZD firms

WELLINGTON/SYDNEY: The Australian and New Zealand dollars held sharp overnight gains on the dollar and euro on Wednesday, as upbeat German and US data sparked a relief rally, though the overall mood remained brittle.

Aussie dollar extends gains to a one-week high of $1.0114, from $1.0059 in New York on strong Asian bourses. First resistance at $1.0120, the 50 percent retracement of the December slide, with support at $1.0028. Traders cite bids around $1.0050.

NZ dollar also firmer at $0.7700, from $0.7682 in New York, having risen as high as $0.7715 overnight, highest in one week. Immediate resistance at $0.7720, the 61.8 pct of the December fall, ahead of $0.7873, the cloud base. Support at $0.7585.

It briefly touched a session low of $0.7667 after worse- than-expected current account data.

New Zealand's Q3 current account deficit widens more than expected in the third quarter driven by soft trade position and foreign banks earning bigger profits in NZ. Deficit widens to 4.3 pct of GDP, from 3.7 pct in Q2 and expectation of 3.9 pct in Reuters poll.

Antipodeans power up against the euro, having already gained 1 pct overnight. Single currency last at A$1.2969 and nearing the all-time low of A$1.2918 struck in December 2010. A clear break would target the psychological level of A$1.2500.

Euro under pressure against the kiwi, having plumbed 3-month lows of NZ$1.6950. Last at NZ$1.6991.

Kiwi being driven by broader global market momentum and shrugging off local negatives such as a fall in prices in dairy giant Fonterra's latest milk auction, after the past two events have seen prices rise.

NZ Q3 gross domestic product data due Thursday with expectation for moderate 0.6 percent growth, helped by Rugby World Cup spending and stock building. Construction and exports likely to weigh. See preview

Antipodeans also gain against the yen, with Aussie up at one-week high at 78.81 yen from 77.41 in late Tuesday trade and kiwi near two-week high at 59.94 yen from 59.20.

Euro and risk assets bounced overnight on lower Spanish bond yields and better US housing data. An improvement in German business climate in December also aids risk sentiment hungry for good news. and

NZ government bonds also weaken along the curve extending price losses, sending yields as much as 7 bps higher.

Aussie debt futures retreat from recent highs, tracking US Treasuries. The three-year contract down 0.07 points at 96.980, and the 10-year contract 0.05 points lower at 96.180.