SYDNEY/WELLINGTON: The Australian and New Zealand dollars bounced from lows against the US dollar on Thursday, even as bonds climbed for a fourth session as investors fretted about European debt and the global growth outlook.
Long-dated government bonds leap with the Australian 10-year contract gaining the most. It is last up 0.045 points to 97.085, having risen to 97.130, its highest since late July. It pierced major resistance of 97.044 and now targets 97.34, the July peak.
Three-year contract up 0.05 points to 97.660 and is eyeing 97.717, the 61.8 pct retracement of the June-August decline.
NZ government bonds follow, with yields 4.5 basis points lower across the curve. The 10-yr bond yields 3.5 pct, its lowest in two weeks.
NZ dollar edges up to $0.8262, from $0.8232, having recovered from a low of $0.8184 overnight. It is on track to end the month nearly 3 pct higher. First hurdle seen at $0.8284, the high on Sept 25, with $0.8222 offering support.
Aussie up half a cent from early trade at $1.0392, after skidding to a two-week low of $1.0328 overnight. Aussie looks set to post a 0.7 pct rise in September.
A bounce is Australian job vacancies gave investors an excuse to push the Aussie higher and squeeze short positions. Support for Aussie seen at $1.0340, a 200-DMA, with $1.0400 capping the topside.
Firm Asian stocks help support risk sentiment, though the mood is not exactly euphoric on persistent concerns about a slowing Chinese economy, a key export market to Australia and NZ.
There is also growing speculation that the Reserve Bank of Australia will cut rates next week. Interbank futures show a two-in-three chance of a cut while more of the major Australian banks are now tipping an easing.
That has been weighing on the Aussie which dips to a five-month low of NZ$1.2544 against the kiwi. Last at NZ$1.2571.
A bank survey shows NZ businesses upped their forex hedging in the third quarter on fears of further rise in the local currency over the coming year.
NZ general business confidence eases a shade in September, but respondents were a touch more positive about their own prospects, with expectations of improved export performance, more hiring, and a lift in construction sector activity.
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