The Australian and New Zealand dollars cut losses on Tuesday in a volatile session after Greece secured a second lifeline from international lenders. The Aussie bounced off a session low of $1.0680 to $1.0745, before losing a bit of steam to last stand at $1.0723, still down about 0.3 percent on the day.
The New Zealand dollar climbed to $0.8397 from $0.8341, before steadying around $0.8373, down 0.2 percent on the day. Euro zone finance ministers approved a second bailout for debt-laden Greece that will resolve Athens' immediate repayment needs, but which seemed unlikely to revive the nation's shattered economy. The long-awaited news perked up a market that was growing increasingly frustrated over a lack of a deal.
Minutes of the Reserve Bank of Australia's February policy meeting released earlier in the day revealed nothing new and merely reiterated that a benign inflation outlook meant that the RBA could cut rates if necessary. Analysts, however, said further gains may be limited for the Aussie on relief over Greece.
"Bottom line is a lot is already priced in and the market is well long the Australian dollar. There is also devil in the details that the market is sweating on," said Greg Gibbs, strategist at RBS in Sydney. Immediate support for the Aussie is seen at $1.0689, Friday's low and resistance at the February 9 high of $1.0825. However, a break of the 2012 high of $1.0845 could open up the way for a re-test of the 29-year peak of $1.1081 set last July.