Forex News

Aussie & NZ dlrs edge higher, wary of jobs data

12 April, 2012 - Reuters

SYDNEY/WELLINGTON, April 12 (Reuters) - The Australian dollar inched up versus a broadly weaker U.S. dollar on Thursday, rebounding from a slide to three-month lows, as the possibility of more bond buying by the European Central Bank helped ease market tensions.

  • But the Aussie was at risk more selling if Australian jobs data due later in the day show a rise in unemployment, which would only add to pressure on the Reserve Bank of Australia (RBA) to cut interest rates as early as next month.
  • The Australian dollar traded at $1.0305, a touch higher from around $1.0290 in late local trade on Wednesday, when it fell as low as $1.0226, its weakest since early January.
  • Against the yen, the Aussie traded at 83.32, rising from 83.14 late in the local session on Wednesday, having recovered from a two-month low of 82.43. It was little changed versus the New Zealand dollar at NZ$1.2585.
  • New Zealand dollar traded at $0.8185, having climbed from around $0.8165 in late local trade on Wednesday on the back of the Aussie's broad recovery.
  • Market concerns over EU sovereign risk were calmed somewhat after ECB policymaker Benoit Coeure said more bond purchases from weak euro zone countries remained an option.
  • His comments added to the market's view that the ECB would continue to support debt-ridden countries like Spain, increasing demand for riskier assets.
  • Australian jobs data due at 0130 GMT are expected to show employment edged up a modest 6,000 in March, while the unemployment rate is seen up at 5.3 percent from 5.2 percent.
  • A weak reading could sting the Aussie as it would fuel speculation that the RBA will cut rates from 4.25 percent at its next meeting in May.
  • However, investors have already fully priced in a quarter-point cut for next month, and another 75 basis points of easing by year-end, so it would take an extremely poor number to move the rates market much.
  • Indeed, with the market short of Aussie a strong jobs number would likely have more of an impact.
  • Options with a strike price of $1.0300 due to expire later in the day may anchor the Aussie around current levels.
  • On the upside, it faced technical resistance at $1.0320, its 200-hourly moving average, which could limit any rally made on an upside surprise in the jobs data.
  • Market participants expected the kiwi to track moves in the Aussie given focus on the jobs report, while adding that offers lurking around $0.8225 would limit any upside in the New Zealand currency. Support seen around $0.8150.
  • New Zealand government bond prices edge lower, prodding yields 2 basis points higher across the curve.
  • Australian debt futures ran into profit-taking after recent sharp gains. The three-year contract was off 0.030 points at 96.740 while the 10-year contract held at 96.170.

    (Australia and New Zealand bureaux)

    Copyright Thomson Reuters 2012. All rights reserved.

    The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

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