WELLINGTON/SYDNEY: The Australian and New Zealand dollars kept overnight gains on Thursday on hopes for more US stimulus to support growth and fresh policy measures to keep the euro zone's debt crisis from deepening further, but sentiment remained fragile.
Kiwi edges up to $0.7912, from $0.7885 in NY trade. It briefly touched a peak of $0.7915 after the Reserve Bank of New Zealand (RBNZ) keeps rates at a record low 2.5 pct. The market had priced in a small chance of a cut.
Investors show limited reaction as the statement does little to change market expectations that domestic interest rates will not rise until early or mid-2013.
"The hurdle to prospective OCR moves remains high, with the statement providing little indication of the timetable for OCR hikes," said ANZ chief economist Cameron Bagrie.
"We do not foresee any need for the OCR to move up before the middle of 2013 at the earliest," he said.
In contrast, market pricing implies a 37 pct chance of a rate cut in September due to euro zone risk, while 13 bps of cuts are factored in over the next 12 months.
Kiwi support seen at $0.7810 while resistance at $0.7930, the 23.6 pct retracement of its June-July rally, while further resistance at $0.7961, its 100- and 200-day moving averages.
Aussie holds to gains at $1.0317, having bounced from a one-week trough of $1.0170 hit on Wednesday. It trimmed losses to 0.5 percent for the week from nearly 2 pct.
Resistance seen at $1.0340, the 61.8 pct retracement of the $1.0445-$1.0170 move with stops cited above.
Euro under pressure and nearer to all-time lows hit earlier this week against the Antipodeans. Last at A$1.1757 , from a trough of A$1.1690, and NZ$1.5339 from a bottom of NZ$1.5158.
Aussie perkier on the yen at 80.58 yen, from a one-month low of 79.49, while kiwi scrabbles back to 61.75 from 60.93.
The Aussie is a major beneficiary of massive safe-haven inflows from yield-starved central banks and sovereign funds into government bonds.
Aussie has gained around 7 pct against the greenback since the June low of $0.9581, while it is hovering near record highs on the euro. Australia is one of a very small club of triple A-rated nations left.
Traders said media reports the Federal Reserve was nearer to QE III and a vague hint the European Central Bank might consider granting a banking licence to the ESM had helped sentiment overnight.
Still, the mood is fragile and the Aussie remains subject to high volatility.
Australian debt futures pare recent gains, with the three-year contract 0.08 points lower at 97.810 while the 10-year contract off 0.045 points to 97.265.
NZ government bonds lower, pushing yields up around 2.5 bps higher along the curve.
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