WELLINGTON/SYDNEY: The Australian and New Zealand dollars took another step down from multi-month highs against the US dollar on Wednesday, while investors waited to see if the Bank of Japan (BoJ) will be the next major central bank to ease policy.
Speculation grows the BoJ might act after the Federal Reserve last week delivered a fresh round of monetary stimulus. Decision expected around 0300-0500 GMT.
Aussie & kiwi fall prey to position adjustment following recent hefty gains, with the Aussie slipping to $1.0419, from $1.0441 in early trade. Investors looking for excuses to sell as worries about China's economic health persist.
Kiwi dips to $0.8258 from $0.8267 early, keeping its distance from $0.8354, its highest since early March.
Aussie set to consolidate after last week's rally when it climbed four cents in seven sessions. Solid support at $1.0380-$1.0410, the 55-day MA and 50 pct retracement of the September climb. Resistance found at $1.0500, ahead of key resistance at the double top above $1.600.
Yet, recent sharp gains in iron ore, up 28 pct from their lows, may encourage buying-on-dips. Iron ore is Australia's biggest export earner.
Aussie further weighed by minutes of the Reserve Bank of Australia's September policy meeting, which showed the bank was growing more worried about the global outlook.
Interbank futures suggest a better than 50-50 chance of a rate cut in October, with an easing fully priced in November. RBA's seen cash rate as low as 2.75 percent in 12 months.
Euro pulls back from three-month highs at A$1.2505, having run into profit-taking following hefty gains. It peaked to A$1.2552 on Tuesday. Against the kiwi, it dips to NZ$1.5767, from NZ$1.5901 touched in the previous session.
Euro has climbed between 5 and 7 pct against the Antipodeans since early August as investors massively trimmed short euro positions.
Markets now cautiously waiting for Spain to apply for aid and trigger quantitative easing by the European Central Bank with its own bond-buying programme.
Investors brush off NZ data showing a widening in the country's current account, while a rise in dairy prices at the latest fortnightly auction limits further selling.
The kiwi was seen supported around $0.8225, the high on Aug 6, with resistance seen initially at the overnight high just above $0.8300 and then $0.8325-0.8335, levels hit in April and August.
New Zealand government bonds edge up, prodding yields as much as 3 basis point lower along the curve.
Australian debt futures extend their bounce off three-week lows, with the three-year contract up 0.04 points at 97.440. The 10-year contract adds 0.015 points to 96.785.
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