SYDNEY: The Australian and New Zealand dollars held near record highs on the euro and nudged up on the greenback on Wednesday as investors were buoyed by a raft of upbeat data, ahead of European bond sales.
While a broadly firmer euro held off recent lows against the Antipodean currencies, it still remained dangerously close. It inched up 0.2 percent to A$1.2275 on the Aussie, from an all-time trough of A$1.2222 hit offshore.
Against the kiwi, it was at NZ$1.5926, near the NZ$1.5869 trough plumbed earlier this week.
"The bounce will be tested tonight with Greece starting to re-negotiate their haircut again ... and unless they come up and say 'okay we've agreed', it's probably going to pressure the euro lower," said Joseph Capurso, a strategist at Commonwealth Bank in Sydney.
He expected the euro to fall as far as A$1.2100 in the next few weeks.
"If volatility starts to creep up because of contagion fears, the Aussie will then fall... because it's still a very growth-sensitive currency and very much related to commodity prices and risk."
Dealers said the euro/Aussie trend remained on the downside with support for the euro found at A$1.2170, the lower boundary of the 20-day Bollinger band. Immediate resistance stands at A$1.2363, the 10-day MA and Tenkan line.
The single currency will, once again, be tested when Germany and Portugal hold debt auctions on Wednesday. Spain and France will follow on Thursday.
The Aussie took a breather on sterling, after striking a 27-year peak on Tuesday. The pound was last at A$1.4759 , having slipped nearly 3 percent so far this year with technicals pointing to a downtrend.
Against the US dollar, the Aussie rose 0.2 percent to $1.0400 and looked set to re-test stiff resistance at $1.0410, the 200-day MA, a key level that was broken offshore for the first time since November.
The New Zealand dollar powered up 0.3 percent to a 2-1/2 month high of $0.8037. It was last at $0.8029 and looked poised to test strong resistance at $0.8036, the 200-day moving average, touched in early November.
"Increased selling interests, perhaps a little early, are likely should the NZ dollar find its way back to that technical level," said ANZ-National analysts said in a market note.
Should the kiwi manage to push through the technical hurdle, then resistance would be expected at $0.8056 with initial support at $0.7980 and below that $0.7967.
The currency was aided by a price rise for key dairy exports in the latest Fonterra auction, while housing data showed signs of stabilisation after a sluggish 2010. and
Investors will look closely at fourth quarter inflation numbers due on Thursday, which are expected to show benign price pressures in the economy. Forecasts are for a quarterly rise of 0.4 percent for an annual rate of 2.6 percent.
Such an outcome would back the view that the Reserve Bank of New Zealand will keep rates on hold at a record low 2.5 percent until the second half of the year at the earliest.
In Australia, consumer confidence rose this month with households more optimistic about the economic outlook , while car sales dipped 2.9 percent in December, declining for a second month.
The improved risk climate saw New Zealand government bonds end with a weak tone, sending yields as much as 6 basis points higher.
Australian bond futures were a touch firmer, with the three-year contract up 0.01 points at 96.800 and the 10-year contract 0.025 points higher at 96.180.
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