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Australia, NZ dollars off 1-1/2 week trough in muted trade

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The Australian and New Zealand dollars were off 1-1/2 week lows on Monday, but trading was listless in the absence of economic indicators in the two countries.

[SYDNEY] The Australian and New Zealand dollars were off 1-1/2 week lows on Monday, but trading was listless in the absence of economic indicators in the two countries.

The Australian dollar was at US$0.7572 compared with a low of US$0.7539 touched in the previous session.

The New Zealand dollar stood at US$0.7278, drifting up from a US$0.7195 low hit last week.

"AUD/USD is likely to be guided by offshore developments this week given the lack of local Australian economic data," said Elias Haddad, currency strategist at Commonwealth Bank.

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Market voices on:

"The world economy looks in reasonable shape. The global economic expansion is becoming more broad-based, and this is an environment that is generally supportive for the AUD."

The Aussie is up nearly 1.9 per cent in June so far, its best monthly performance since January. The currency, however, faces stiff resistance at US$0.7636 - a level it touched earlier this month but has repeatedly failed to breach.

Against its New Zealand cousin, the Aussie has fallen off a cliff and is set for its second straight monthly loss in June. The AUD/NZD pair stood at NZ$1.0402, with strong chart support seen at NZ$1.0320.

A weaker US dollar and a less-dovish-than-expected tone from the Reserve Bank of New Zealand had helped prop the Kiwi. The US dollar index is up 0.3 per cent in June against a basket of currencies but follows three straight monthly losses.

With little local data on the agenda, analysts said it would be difficult for the Kiwi to make further gains beyond US$0.7320, the highest level since February touched earlier this month.

"On the balance, we hold a broadly neutral view of the NZD this week. While the rally is beginning to look overdone, dips will likely be shallow at best," said Kiwibank economists in a research note.

New Zealand government bonds gained, sending yields 0.5 basis point lower at the long end of the curve.

Australian government bond futures were mixed, with the three-year bond contract falling one tick to 98.180. The 10-year contract was unchanged at 97.5850.

REUTERS

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