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Aussie dollar regains ground, extends rally vs kiwi
Friday October 30, 07:03 PM
* Aussie regains ground above 91 U.S. cents
* Jumps on the yen, at a three-month high vs kiwi
* Looking ahead to likely rate rise next week
SYDNEY, Oct 30 (Reuters) - The Australian dollar rebounded on Friday, recouping some of the sharp losses seen earlier this week and reclaiming ground above 91 U.S. cents as profit booking by speculators seemed to run its course.
By evening the Aussie was at $0.9161, up from $0.8989 late here on Thursday and within sight of 14-month highs of $0.9330 struck last week. It had jumped over 2 cents from a three-week low of $0.8942.
It also surged against the yen AUDJPY=R, adding over 2 yen to 83.46 yen from 81.13 yen late on Thursday as unwinding of long positions by Japanese leveraged players ebbed.
"This was a much needed correction for the Aussie where a lot of stale long positions got unwound," said Tony Beiber, forex analyst at Suncorp Bank.
"We could see it pop its head above 92 U.S. cents if we get more positive U.S. data later today. Better data would provide a fillip to commodities and stocks and hence the Aussie."
The University of Michigan consumer sentiment survey for October, the Institute of Supply Management Chicago's October index for manufacturing activity along with U.S. personal income consumption data for October and are data investors will keep an eye. [ECONUS]
It will follow data which showed the U.S. economy expanding at a faster than expected pace. The world's largest economy grew at an annualised rate of 3.5 percent in the July-September period, beating forecasts of a 3.3 percent rise and ending a deep slump. [nN29354547]
The U.S. dollar, which tends to lose when optimism about a recovery global recovery gain ground, traded below the 76 mark against a basket of currencies .DXY =USD and not far from 14-month low of 74.94 struck on on Oct. 21.
The Aussie extended it impressive gains on the kiwi, AUDNZD=R, rising to its highest in nearly three months at NZ$1.2548.
Investors expect the Aussie to gain further with local rates headed higher, while those in New Zealand expected to remain low well into the first half of 2010.
The Reserve Bank of Australia (RBA) is widely expected to lift its key cash rate by 25 basis points to 3.5 percent at its monthly policy meeting next Tuesday. [AU/INT]
Australian bond futures were mixed, with the long end giving up some of its impressive gains made in the previous session after safe-haven inflows eased. But the shorter end moved up on bargain hunting.
Three-year futures YTTc1 were 0.03 points higher at 94.87 while the 10-year contract YTCc1 lost 0.025 points to 94.415.
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