Markets

Aussie & NZ dollar steady ahead of US jobs

Published Updated

The Aussie dollar stands at $1.0235, barely changed from late New York levels. Still, it is on track to gain more than 4 pct this week.

Earlier in the week, the Aussie peaked at $1.0335 -- a level not seen since Nov. 14 -- after major central banks moved to ease a credit squeeze stemming from the euro zone debt crisis. But lack of hard action to tackle the root of the region's problem has tempered optimism since.

Aussie seen likely to trade sideways going into the US non-farm payrolls data. Resistance at the week's high, which is also the 61.8 pct retracement level of the Nov. decline.

The NZ dollar at $0.7808 vs NY's $0.7781. It has risen nearly 4 pct this week and remains near the high of $0.7824.

Support for the kiwi seen around $0.7730, while the 55-day moving average at $0.7900 is likely to cap the topside.

No data on either side of the Tasman, leaving focus squarely on US non-farm payrolls due at 1330 GMT.

Forecasts centre on addition of 122,000 new jobs and a steady unemployment rate of 9.0 pct. A higher-than-expected number could whet risk appetite once again and lift risk currencies such as the Aussie and kiwi.

Antipodeans also little changed versus yen and euro, although common currency at A$1.3160 is drifting up from a three-month trough of A$1.3053 plumbed on Monday.

Reserve Bank of Australia meets next Tuesday, and interbank futures are implying an 80 percent chance of a 25 basis points cut to the 4.5 percent cash rate.

Aussie debt futures softer, with the three-year contract down 0.03 points at 96.710, and the 10-year contract 0.045 points lower at 95.915.

The Reserve Bank of New Zealand also meets next week. Analysts and markets are unanimous in expecting no change to the record low 2.5 pct cash rate.

Market pricing has shifted this week to a flat rates outlook over the coming year, from implying an easing bias. Analysts in Reuters poll looking increasingly at a later start to rate hikes.

NZ government bonds softer, with yields a tick higher along the curve.

Copyright Reuters, 2011