WELLINGTON/SYDNEY: The Australian and New Zealand dollars inched backwards on Wednesday as Asian investors proved unwilling to test major chart resistance while the European crisis remained so uncertain.
The Aussie was trading at $0.9935 midday, up a third of cent on Tuesday but off an early peak of $0.9970. The currency has repeatedly failed to break above $1.0010/35 resistance in recent days, leaving bulls cautious.
NZ dollar settles around $0.7760, having touched a four-week high of $0.7789 in early trade. It has gained more than 0.7 percent in the past 24 hours. Near-term support seen at $0.7726, with $0.7798 the first hurdle higher and above that $0.7813.
Kiwi seen supported ahead of Reserve Bank of NZ's policy review on Thursday, when rates are expected to stay at 2.5 percent
Markets pricing of a rate cut this week has eased to 13 pct from as high as 80 pct a month ago.
NZ Finance Minister Bill English says economy is going through a period of "grumpy growth" driven by the earthquake rebuild and relatively strong terms of trade. But he warns the high NZ dollar is a headwind and the euro zone's fiscal woes loom as a "dark cloud" on the horizon.
Reserve Bank of Australia (RBA) Governor Glenn Stevens sounds less concerned about the high Aussie currency, saying it helps bring down import prices while making local consumers relatively better off.
Australian consumers still not feeling too happy, however, with the latest Westpac survey of sentiment showing barely any improvement in June despite lower rates and better economic data
Aussie and kiwi hold their gains against the yen. Aussie at 79.20 yen, not far from a three-week high of 79.71 struck last week. The kiwi at 61.80 yen, in sight of the one-month high of 61.97 yen hit on Monday.
Aussie firmer around NZ$1.2812 ahead of the RBNZ's rate decision.
The Aussie also made ground on the euro, which hit a three-month low of A$1.2541 overnight and a long way from May's highs around A$1.3000.
Australian bond futures lower, tracking Treasuries. The three-year contract eased 0.06 points to 97.625, while the 10-year contract dipped 0.035 points to 97.030.
NZ government bonds also softer, with yields around 2 bps higher across the curve.
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