Donald, Update on the Ozzie buck....it's little buddy the Kiwi,
is at a 9 month high....why are you following AUD?? for a currency
Trade....something more sinister???
Best regards,
John
Wednesday February 3, 7:32 am Eastern Time
Aussie buoyed by economic cheer, NZ$ at 9-mth high
LONDON, Feb 3 (Reuters) - The Australian dollar stuck close to its two-week highs against the U.S. dollar on Wednesday,
boosted by a stream of cheerful data on the Australian economy which stood out against a backdrop of general global gloom.
The Aussie's rally buoyed its New Zealand counterpart, which rose to its strongest in nine months against the U.S. dollar on the
back of technical trading.
The latest piece of bullish Australian news was data showing building approvals for December rose by 6.4 percent, far outstripping forecasts of 0.3 percent.
The Aussie's rise was also spurred after the Reserve Bank of Australia made no announcement on interest rates at its regular money market window on
Wednesday, quashing some speculation of an easing in monetary policy.
"There's been a whole bunch of economic data on Australia this week which has been consistently good, and there was no interest rate cut, either," said James
Shugg, senior economist at Westpac in London.
"It distinguishes Australia from other economies suffering from the global downturn, and shows that it is one of the healthiest economies alongside that of the U.S."
The Australian dollar was quoted at US$0.6420/25 at 1125 GMT, just off its earlier high of 0.6428 which was its strongest since January 21.
The currency has been rising steadily for the past week and has gained 3.2 percent against the U.S. dollar during that time. Data earlier in the week showing a
shrinking Australian trade deficit and a surge in business confidence have encouraged Aussie dollar bulls. A rebound in commodities prices since late January has
also helped.
There are some expectations that the Aussie is bound to slip back after such a rally, but not by very much.
"On the basis of economic fundamentals we think fair value for the dollar is 61 cents. So we're three cents above fair value at the moment which is not very unusual.
We're likely to see a dip, but not right now," Shugg said.
From the viewpoint of technicals, the dollar is running up against chart resistance at $0.6440-60, which has blocked the currency twice over the past few weeks.
The Kiwi was last at US$0.5498/05, just off its high of 0.5504 which meant the currency had gained 3.4 percent over the past week. However, it will have to put
up a fight to extend its gains near term given New Zealand corporates are likely to sell into the rally at about $0.5520/30, one trader said.
Technical analysts say the Kiwi is now facing a critical level on the charts.
"The Kiwi has seen a nice pullback so far but now it's very close to a key area just below 55 (cents)," said Gerry Celaya, senior technical analyst at American
Express Bank in London.
"There's potential for it to rise to the 60 zone if it gets above there, but if we stall below that area we could see it come back down to 53 and into a very flat range."
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