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Australia, New Zealand dollars fly higher, eye China data
24 Mar 2015 - 00:54
SYDNEY/WELLINGTON, March 24 (Reuters) – The Australian and New Zealand dollars remained in the ascendant against the U.S. dollar on Tuesday as investors scaled back bets on the pace of rate rises by the Federal Reserve.
The Australian dollar extended its recent rally to $0.7880, having gained 1.4 percent on Monday. It has jumped around 3 cents in five sessions and was well off a six-year trough of $0.7561 plumbed earlier in the month. A break of $0.7914 would take it to the highest in nearly two months.
The New Zealand dollar was hovering around a two-month high at $0.7660 as it remained a major beneficiary of U.S. dollar weakness. It has gained more than 3 percent since last week's Fed's statement.
Much of the recent bounce has come from a shake-out in U.S. bullish positions in the wake of the Federal Reserve's dovish steer last week.
The Aussie held near two-month highs against the yen and pound .
Also underpinning was firmer commodity prices as copper broke a key retracement level overnight.
"Energy prices have generally bolstered the 'commodity bloc' currencies, but particularly interesting for the Aussie was the fourth consecutive daily advance for gold and a volatile bullish swing in copper prices," said John Kicklighter, chief currency strategist at FXCM.
For the kiwi a break of key resistance at $0.7610 and a move above the 100-day moving average of $0.7634 were seen pointing to continued strength and a possible assault on $0.7800, a level last seen in mid-January.
The kiwi was also being supported by its hefty gains on the Aussie, which overnight fell to a post-float low of NZ$1.0211 .
Similarly, the euro was nursing hefty losses having hit a post-float low of NZ$1.4123 overnight. It last traded at NZ$1.4286.
Immediate focus was on HSBC Flash Manufacturing PMI for China. The Antipodeans are sensitive to news out of China, a key export market.
New Zealand government bonds had a hint of a bid tone, with yields fractionally higher along the curve.
Australian government bond futures retreated from recent peaks, with the three-year bond contract off 2 ticks at 98.250. The 10-year contract was unchanged at 97.6150.
Two-year cash yields touched a record trough of 1.72 percent, well under the cash rate of 2.25 percent.
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