The Australian and New Zealand dollars struggled to sustain early gains on Monday as markets were on guard despite upbeat economic data from China that seemed to lessen the risk of a hard landing there. The Australian dollar seesawed to $1.0402, having initially rallied more than a cent to $1.0470 in early trade as a series of stop losses were tripped.
Also weighing on the Aussie was a surprisingly weak reading on domestic housing and a hourly gap around $1.0360/70 which is doomed to be filled, according to some traders. "The move was a bit overdone, the Aussie surged quite rapidly. It's still a pretty good day for the Aussie," Greg Gibbs, a strategist at Royal Bank of Scotland. Indeed, the Aussie was up 0.4 percent from Friday in New York and well off a near three-month low of $1.0305 last week.
The New Zealand dollar's gains similarly faded in late trade as it slipped back to $0.8193, from a high of $0.8247, though that was still up from $0.8171 in NY on Friday. The kiwi climbed as high as 68.37 yen in early trade, before steadying at 68.12 yen. It has gained nearly two yen since Thursday. Against the US dollar, the kiwi failed to make a sustained break above resistance at $0.8240, its 55-day moving average. But dealers felt big losses were unlikely as investors were ready to buy on any slide towards $0.8100.
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