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Australia dlr struggles near 3-mth high, NZ$ pauses

Published 13/02/2017, 12:48 pm
Updated 13/02/2017, 12:50 pm
Australia dlr struggles near 3-mth high, NZ$ pauses

By Swati Pandey and Charlotte Greenfield

SYDNEY/WELLINGTON, Feb 13 (Reuters) - The Australian dollar stayed near a 3-month high on Monday but fizzled again at the crucial 77 U.S. cents barrier after repeatedly failing to breach the key chart resistance point and amid broader greenback strength.

The Australian dollar AUD=D4 held at $0.7667, after rising as far as $0.7689 on Friday when it climbed 0.7 percent.

The Aussie has traded in a sideways direction since the beginning of February, failing persistently at the $0.7700 mark. Analysts expect the struggle to continue, pending the release of important economic data later this week.

"While employment on Thursday is the most important monthly data point for traders, the release of NAB monthly business survey is the key for me," said Greg McKenna, chief market strategist at Axitrader

"That's because it gives us not only a window into business confidence across the nation but also into the actual conditions businesses are reporting."

The Aussie is already up more than 6.5 percent this year thanks to resurgent iron ore, Australia's biggest export earner, and on an upbeat assessment of the economy by the country's central bank. string of recent data also showed the A$1.6 trillion economy likely averted a recession in the December quarter after a shock contraction in the third quarter of last year.

Technical analysts say a breach above $0.7700 could see the Aussie hitting $0.7740 and then $0.7770/80.

Elsewhere, the Aussie paused against its New Zealand counterpart AUDNZD=R after scaling a more than 4-month peak on Friday.

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On the euro EURAUD=R , it was at its highest since April 2015 while it held at a one-year top on the yen AUDJPY=R .

In contrast, the New Zealand dollar NZD=D4 hovered around two-and-a-half week lows, struggling to recover after the country's central bank signalled it will keep rates at record lows for two years. Kiwi stood at $0.7190 on Monday, inching up from $0.7172 hit last week after the Reserve Bank of New Zealand (RBNZ) cited growing global uncertainty for its downbeat outlook.

The Kiwi tumbled 1.5 percent last week, its worst performance since the week of Dec.16.

However, analysts expect the Kiwi to pick up on strong domestic growth, thanks to robust migration and a revival in the price of milk, New Zealand's biggest goods export earner.

"The RBNZ has clearly knocked the NZD lower...however, we still find it difficult to get overly bearish on the NZD given a still solid economic picture," said Philip Borkin, senior economist at ANZ.

New Zealand government bonds 0#NZTSY= eased, sending yields 4.5 basis points higher at the long end of the curve.

Australian government bond futures were mixed, with the three-year bond contract YTTc1 up 1 tick at98.050. The 10-year contract YTCc1 slipped 1 tick to 97.2650. (Editing by Kim Coghill)

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