Markets

Aussie & NZ dollars hold gains post-ECB, US jobs loom

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The Aussie steady at $0.9737, from $0.9741 in New York, having gained 0.8 pct overnight. It peaked to $0.9768 where it met resistance on profit taking.

Bouncy regional equities, up around 2 pct in Australia and Korea, support commodity currencies.

The Australian dollar remains highly vulnerable to wild swings in sentiment driven by the euro zone debt crisis. It has traded between a one-year low of $0.9388 and $0.9766 in the past five sessions and is now 0.8 pct so far this week.

Next level of resistance is the Sept 30 high of $0.9810, ahead of $0.9915, the 38.2 pct Fibo of the $1.0765/$0.9388 move. Support is found at the daily tenkan line at $0.9687 and the 100-week MA at $0.9672.

Traders said a break of the 2-year MA would encourage more short-covering.

The NZ dollar marks time at $0.7700, from $0.7715 in NY, having hit a one-week high of $0.7727 in offshore trade. Support remains around $0.7655 with $0.7750 likely to cap the topside. Any further appreciation will set it to test $0.7890.

Kiwi, like the Aussie, has had a euro-crisis driven roller coaster ride this week, swinging between a six-month low of $0.7470 and $0.7727. The currency has fallen nearly 13 percent since hitting a 30-year peak of $0.8842 in early August.

Attention now on US non-farm payrolls report for September which presents a risk to the recent sentiment rally. Forecast are for 60,000 new jobs created and an unemployment rate of 9.1 percent.

Some are hopeful for strong results following recent labour data showing US initial jobless claims rising less than expected.

The better risk climate sees the Antipodeans move away from the multi-month lows against the safe-haven yen. The Aussie stood at 74.68 yen , having dipped earlier this week to its lowest since May 2010 at 72.04. The kiwi was at 59.07 yen from a five-month trough of 57.33 yen.

The Aussie outperforms the kiwi, sending the cross rate higher to NZ$1.2630 from this week's low of NZ$1.2492 .

NZ government debt down, following US Treasuries fall on the European debt moves. Local yields up to 13 basis points higher.

Investors seem little moved by the double ratings downgrades dished out to NZ last week, judging by the result of the weekly bond tender on Thursday, with the NZ$200 million well bid and yields close to secondary market yields.

Australian debt trims recent hefty gains, with three-year futures contract easing 0.06 points to 96.420 and the 10-year off 0.085 points to 95.730. On Wednesday both contracts peaked to levels not seen since 2009.

Copyright Reuters, 2011