WELLINGTON/SYDNEY: The Australian dollar edged up on Friday after Reserve Bank of Australia (RBA) Governor Glenn Stevens said monetary policy was "broadly neutral" for the moment, stoking speculation the central bank may hold off from cutting interest rates in the coming months.
The Aussie rises around 0.3 percent to the day's high of $1.0740 as Steven's comments prompt some in the market to speculate the RBA may hold interest rates at 4.25 percent for the near term.
The RBA held rates steady this month, surprising many in the market who had been betting for a cut. Stevens said the headwinds and negatives Australia faces get more coverage, but the economy is on a long upswing.
Stevens describes the Aussie dollar's strength as "a bit odd", but the RBA has the option to intervene. For the highlights of Stevens' testimony see
Aussie technical support seen at $1.0711, the 21-day moving average. Below that, Thursday's low of $1.0597 and the monthly low of $1.0570. Resistance at $1.0755/60, this week's high, and $1.0800, which Aussie has failed to hold above all month.
The New Zealand dollar also edges up 0.3 percent on the day to a session high of $0.8374, having clawed back from a low of $0.8264 hit on Thursday.
Kiwi stays off a near six-month high of $0.8429 hit on Monday, and its rally since mid-December has lost steam with investors looking to lock in profits as risk demand fades.
Firm demand for the kiwi around $0.8360, and it is seen wedged in a $0.8240-$0.8430 range in the near term.
Immediate technical support was seen at $0.8322, the kiwi's 21-day moving average, which has acted as a key pillar since the start of the year.
The kiwi was little changed against the Australian dollar at NZ$1.2803. The Aussie recovered from a slide to NZ$1.2727 earlier in the week, its weakest since early October.
The Antipodeans have benefited from the euro's renewed strength, which has seen it hover around 2-1/2-month highs on improving German business sentiment, which prompted a short squeeze.
Both currencies extend gains against the yen in the improved climate for risk and may retest multimonth highs visited on Monday. Aussie last up 0.3 percent at 86.06 yen , and the kiwi at 67.13 yen.
Australian debt futures retreat, with three-year bond futures contract down 0.08 points at 96.270, while the 10-year contract falls 0.055 points to 95.850.
New Zealand government bonds edge lower, sending yields around 6 basis points higher across the curve.
Comments
Comments are closed for this article.