SYDNEY/WELLINGTON, Nov 8:
The Australian and New Zealand dollars marked time on Friday, unable to keep gains built up on solid trade numbers from China as investors were unwilling to take big positions ahead of a key jobs report in the United States.
The Aussie initially gained a third of a cent to $0.9482 after exports from the resources-rich nation’s biggest trading partner China rose more than expected in October, rebounding from a surprise fall the previous month.
However, it drifted back to $0.9456, exactly where it started the session and steady on the week so far. Solid support was seen around $0.9420, with stops cited below, while resistance was put at $0.9510 and $0.9544.
Chinese imports from Australia rose a whopping 56.2 percent in October, from the same month last year, the fastest pace of annual growth in at least a year.
Such strength was welcome news for a sluggish Australian economy. The Reserve Bank of Australia (RBA) on Friday trimmed its forecasts for economic growth and left the door open to further policy easing if needed.
The RBA expects growth of 2-3 percent by the end of 2014, down from a previous forecast of 2.5-3.5 percent. But it still expected the economy to accelerate to 2.75-4.5 percent in 2015, as previously flagged.
The Aussie trimmed hefty gains versus the euro and was struggling against a broadly firmer Japanese yen.
The focus is now on an influential jobs report in the United States. A strong reading could add to the case for the Federal Reserve to taper its stimulus sooner rather than later.
‘If we get a surprise number to the upside, the Aussie will move significantly lower,’ said David Scutt, a trader at Arab Bank Australia.
NEW ZEALAND DOLLAR
The New Zealand dollar was a touch firmer at $0.8330, having risen to $0.8345 after the Chinese numbers. It is up 0.7 percent so far on the week, having touched a two-week high of $0.8415 on Wednesday after strong local jobs figures.
‘Conviction levels are not particularly high though, with tonight’s U.S. Non-farm payrolls report looming large in traders’ minds. As a result, currencies are a little flighty,’ said BNZ currency strategist Mike Jones.
Near-term support for the kiwi is seen at $0.8305 and below that $0.8280, with $0.8355 the first hurdle higher.
New Zealand government bonds were a touch firmer, with yields half a tick lower along the curve.
Australian government bond futures bounced marginally from recent lows, with the three-year bond contract up 3 ticks at 96.900. The 10-year contract added 2 ticks to 95.910. (AGENCIES)
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