WELLINGTON/SYDNEY: The Australian and New Zealand dollars showed resilience on the US dollar on Monday, following last week's raft of euro zone downgrades, while clocking new record highs on a broadly bruised euro.
The Aussie was aided by demand for Australia's still triple-A rated debt, which saw hefty gains in bond futures. Australia is now one of only 14 countries with the top rating from S&P.
Australian bond futures leap with the 3-year contract up 0.12 points to 96.850. The 10-year contract jumped 0.14 points to 96.235, flirting with an all-time peak of 96.300 struck on Dec 30.
The Aussie edges off to $1.0262, from Friday's $1.0315 in New York. Still, that was a modest fall given the S&P action, growing doubts over Greece's ability to avoid default and lower stocks across Asia.
Key support seen at $1.0220, with strong resistance at around $1.0370/85 where it has been knocked back several times this month.
Traders cite bids around $1.0250 with $1.0411, the 200 DMA providing topside pivot.
The NZ dollar recoups most offshore losses, holding around $0.7927, or 0.2 pct lower from Friday, having hit a low of $0.7867 in offshore trade.
Key support is seen around $0.7890, a 200-day moving average, with initial resistance at $0.7981 ahead of $0.8000.
Euro at A$1.2310 just above a fresh record low of A$1.2255 struck offshore, having lost nearly 3 pct this month. It stands at NZ$1.5941, near a life-time trough of NZ$1.5869 touched in early Asia.
Euro depressed across the board following the anticipated ratings downgrade by S&P of 9 euro zone countries.
The Aussie holds around NZ$1.2939 against the kiwi, near 10-week lows of NZ$1.2910 struck last week.
Australian housing finance rose 1.4 pct in November, beating a 1 pct increase forecast, helped, in part, by the Reserve Bank of Australia's easing at the start of the month.
A private gauge of Australian consumer inflation rose in December but still pointed to a very subdued outcome for the fourth quarter as a whole, suggesting plenty of scope for further cuts in interest rates.
Interbank futures pricing implies a 72 pct chance of a 25 bps rate cut to 4 pct in February.
Jobs ads in Australia on in newspapers and on the internet dipped 0.9 pct in Dec, a private survey showed, likely pointing to only modest growth in employment ahead.
New Zealand government bonds were sharply higher, sending yields up to 0.07 points lower along the curve.
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