Aussie & NZ dollars slip on lower stocks

WELLINGTON/SYDNEY: The Australian and New Zealand dollars dipped on Monday in thinning year-end volumes, dragged by lowe
19 Dec, 2011

Aussie dollar soft at $0.9936 vs $0.9987 in late NY trade on Friday. It lost 2 pct last week but did manage to bounce from lows around $0.9862.

Support seen around $0.9910, and $0.9862 with $1.0052 capping the topside. Traders cite buying interest at $0.9930.

NZ dollar slips to $0.7592, having climbed to $0.7645 at one stage, from $0.7620 in NYC. It shed around 2 pct last week, and is seen testing 200-day moving average at $0.7661 with support seen around $0.7532.

Sharp falls in Australian and Korean stocks, more than 2 pct lower, undermine Antipodeans.

Markets concerned by more ratings downgrades in the euro zone. Media reports France faces an up to double-notch cut by S&P before Christmas.

Aussie slips to three-week trough against a broadly stronger Swissy. SNB disappointed speculators last week when it held its cap on the franc at 1.20 per euro. Last at 0.9325 Swiss francs, lowest since Dec. 1

Antipodeans a touch firmer against the yen, with Aussie edging up to 77.57 yen from last week's low of 76.92 and kiwi to 59.21 yen from 59.02.

Kiwi softer after two confidence surveys pointing to weaker economic outlook. Westpac McDermott Miller's consumer confidence survey falls to its lowest level in nearly three years. A separate National Bank's business confidence survey shows a modest dip as worsening global outlook filters through to sentiment.

The data further harden expectations for NZ central bank to keep rates on hold for longer, and adds to cautious risk sentiment, which has been weighed by the euro zone debt crisis. Kiwi also faces more pitfalls later in the week with current account and GDP data due.

Markets pricing implies 22 pct chance of a 25 bps cut next month and 8 bps of cuts next year. In contrast, analysts polled Reuters expected a hike in H2 next year.

NZ government bonds' early gains eroded, with yields now two basis point higher.

Australian debt futures firmer, with the three-year contract 0.05 points higher at 97.050. The 10-year contract gained 0.06 points to 96.235, near record highs.

Copyright Reuters, 2011

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