Markets

Aussie & NZ dollars trims losses after euro debt battering

WELLINGTON/SYDNEY: The Australian and New Zealand dollars were off their lows but looking vulnerable on Tuesday, after

Published September 19, 2011 Updated September 19, 2011 10:04pm

2 min

By Abdul Ahad

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* The Aussie manages to claw back to $1.0215, after ranging $1.0167 to $1.0267 overnight. It had been pushed and pulled by the fluctuations in risk aversion driven by the euro zone debt issue. It had finished locally on Monday at $1.0230.

* The Aussie now seen drawing support initially at $1.0200 with $1.0170 below that, while $1.0267 the first line of resistance.

* The New Zealand dollar followed the Aussie and euro on the risk-on/off journey, resuming around $0.8230 after trading $0.8172 to $0.8260 overnight. The currency seen supported at $0.8170 with resistance at $0.8290.

* The euro slides broadly, though came off its lows late in the session, with the Greek debt issue and fears of default overshadowing all else and sending investors to take refuge in US Treasuries and the dollar.

* Some optimism engendered after Greece said it was close to a deal with the European Union, International Monetary Fund and the European Central Bank following a conference call with international lenders, which continues late on Tuesday. For details, see

* Antipodean currencies fall against the yen and Swiss franc, although they trim losses on Greek debt hopes.

* Aussie loses ground to the kiwi on the cross rate hitting a one-month low of NZ$1.2343 before trimming losses to sit around NZ$1.2397.

* Data calendar free on both sides of the Tasman, but minutes from Reserve Bank of Australia's September meeting to be released and will be scrutinised for any hint on whether rate cuts may be on the agenda.

* The market continues to price in around 90 basis points of easing by year-end, but the RBA has shown no inclination to cut given a still-booming mining sector.

* NZ second quarter current account and growth data due next couple of days. A Reuters poll forecasts the economy grew 0.5 percent, while the current account deficit is seen shrinking slightly to 4 percent of GDP.

* New Zealand government bonds flat, but interest rate futures a touch firmer. US Treasuries rose on safe-haven buying.

* Australian bond futures mixed with the three-year contract indicated down 0.01 points to 96.420 but the 10-year 0.01 points higher at 95.835.

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