WELLINGTON/SYDNEY: The Australian and New Zealand dollar were off multi-month highs on Tuesday as investors booked profits on short euro positions, while awaiting data from Europe and the United States which could add to global growth concerns.
Aussie fetches $1.0522, having trimmed overnight losses thanks to firmer Asian bourses and demand out of Tokyo.
The Australian dollar fell to a low of $1.0497 on Monday, after it had stretched its legs to $1.0615 last week, the highest since late March.
Immediate support seen at $1.0497, then $1.0430, with resistance found around $1.0530, ahead of $1.0580 where stops are cited.
NZ dollar climbed to a high of $0.8113 after upbeat retail sales figures, from $0.8081 late in NY trade. Last at $0.8100.
NZ Q2 retail sales volumes rose 1.3 pct, vs forecast 0.7 pct increase, pointing to some consumer resilience. The data was welcome following last week's poor jobs market report which dethroned the kiwi dollar from a peak of $0.8224, its highest since late April.
Support remains around the low on Aug 2 at $0.8070, then $0.8028, with resistance at $0.8150, the high of Aug 8.
Markets pricing still implies a 13 pct chance of a rate cut at next month's review because of an uncertain global outlook, tame domestic inflation and a high local currency.
Against the Aussie, the euro last at A$1.1727, from a low of A$1.1618 on Monday. The euro had lost around 10 percent since mid-May, having tumbled to an all-time trough of A$1.1597 early this month.
The euro at NZ$1.5228, from a low of NZ$1.5100 on Monday and a record trough of NZ$1.4955 hit on Aug. 3.
Yet, analysts see the correction as a temporary blip as the euro has become the currency of choice to fund carry trades. With the fear index at its lowest in five years, analysts say carry trade demand is likely to continue.
Australian business conditions deteriorated in July as retailers and wholesalers complained of falling sales and profits, a private survey showed, even as it found a marked improvement in confidence as firms thought things would get better.
Markets await euro zone second-quarter economic output, which is expected to show a contraction and is likely to put pressure on the ECB to cut interest rates, a factor that could weigh on the euro.
US retail sales data for July are due later and will offer an important update on how consumer demand fared at the start of the third quarter.
NZ government bonds softer, with local yields up around 1.5 bps across the curve.
Australian bond futures ease with the three-year contract 0.030 points down at 97.290, while the 10-year contract nudges 0.020 points lower to 96.805.
Comments
Comments are closed for this article.