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Australia, NZ dlrs pinned down by weak commodities, RBA eyed

Published 24/11/2015, 01:26 pm
© Reuters.  Australia, NZ dlrs pinned down by weak commodities, RBA eyed
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By Cecile Lefort and Rebecca Howard

SYDNEY/WELLINGTON, Nov 24 (Reuters) - The Australian and New Zealand dollars shuffled sideways on Tuesday as falling commodity prices, broad U.S. dollar strength and major resistance levels disrupted their recent rally.

The Australian dollar AUD=D4 inched up to $0.7204, from $0.7187 in early trade. It has gained around two cents in the past two weeks but met heavy resistance near $0.7250, a level tested four times since late October.

Dealers said the Aussie was likely to consolidate between $0.7150 and $0.7250 until fresh news emerged.

Reserve Bank of Australia (RBA) Governor Glenn Stevens gives a speech titled "The Long Run" to economists at 0905 GMT and is likely to reaffirm that rates are on hold for now.

Dealers saw a risk he might try and talk down the Aussie given it has proved resilient to a sharp fall in the price of iron ore, Australia's top export earner.

Spot iron ore lost more than 5 percent last week and came close to its lowest level since July amid a global glut and faltering Chinese demand.

The Aussie came off multi-month highs versus the yen, euro, Swiss franc and kiwi.

The New Zealand dollar NZD=D4 held at $0.6532 after failing to sustain a break above $0.6600 last week. It was expected to trade within a range of $0.6490 to $0.6610.

Milk futures, which have risen from recent lows, provided some support to the kiwi, analysts said.

New Zealand government bonds 0#NZTSY= gained, sending yields 3 basis points lower at the short end of the curve.

Australian government bond futures bounced, with the three-year bond contract YTTc1 up 3 ticks at 97.860. The 10-year contract YTCc1 also added 3 ticks to 97.0600, while the 20-year contract YXXc1 gained 2.5 ticks to 96.5350. (Editing by Kim Coghill)

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