Australian dlr bumps up against stiff resistance, BoJ eyed

Tue, 18 Feb - 11:59am

* Barrier of $0.9080-$0.9090 challenges Aussie

* RBA minutes see signs stimulus working

* Market to sift BOJ statement for easing hints

By Gyles Beckford and Cecile Lefort

SYDNEY/WELLINGTON, Feb 18 (Reuters) - The Australian dollar rose to tackle stiff chart resistance on Tuesday, with investors waiting to see whether the Bank of Japan would hint at the possibility of further easing ahead.

The Aussie AUD=D4 scaled a fresh one-month peak of $0.9081 where it met a heavy technical barrier. It has tried four times in recent weeks to sustain a break above this year's peak in the $0.9080-90 area, which also marks the 38.2 percent retracement of its fall from October to January.

It was last at $0.9066, from $0.9028 in early trade, with dealers suspecting the bounce had more to do with positioning than with the minutes of the Reserve Bank of Australia released earlier in the session.

"Markets are thin. The Aussie has been trying to get through this level for a while. It is just trying to trip stops," said David Scutt, a trader at Arab Bank Australia.

"There is nothing in the (RBA) statement that would explain (the move higher)," he added, seeing an opportunity to sell the currency should it go above 91 cents.

In minutes of its Feb. 4 meeting, the central bank said it kept rates on hold at 2.5 percent as it saw signs policy stimulus was working to spur economic activity. News Search ID:nRUAHDEA4E

The Aussie extended recent gains to 92.61 yen AUDJPY=R , from a low of 91.07 last week, as the market awaited the outcome of the Bank of Japan's policy meeting likely to come after 0300 GMT.

Investors expect the central bank to hold policy steady, but it may hint at the possibility of further easing ahead.

The New Zealand dollar NZD=D4 was marking time at $0.8360, after hitting a one-month high of $0.8393 overnight. It has been rallying now for 11 sessions, in part due to a pullback in the U.S. dollar, but faces resistance in the $0.8407/33 zone.

"Currency markets will take note that further NZ dollar strength needs positive New Zealand (data) surprises to continue," ANZ analysts said in a note.

The kiwi was softer against the neighbouring Aussie dollar after the RBA minutes, but remained in recent ranges at NZ$1.0840 AUDNZD=R .

The local data flow resumes with a batch of numbers on Thursday, including fourth quarter producer prices, job adverts and consumer confidence.

New Zealand government bonds 0#NZTSY= were largely flat, with a hint of an offered tone along the curve.

Australian government bond futures fell with the three-year bond contract YTTc1 down 2 ticks to 96.960. The 10-year contract lost 1 tick to 95.885.

(Editing by Eric Meijer)

((Cecile.Lefort@thomsonreuters.com)(+61 2 9373-1234)(Reuters Messaging: cecile.lefort.thomsonreuters@reuters.net))

Keywords: MARKETS AUSTRALIA/FOREX

URN: 
urn:newsml:reuters.com:20140218:nL3N0LN05K:4
Topics: 
JP US NZ AU FRX ASIA REP DBT LEN RTRS INT CEN MCE MMT AMERS

Contact Us

Due to the security nature of our business, personal meetings are only by pre-arranged appointment.
Phone at any time on

1300 987 995

info@ausmint.com