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Australian dollar holds near 3-1/2-mth peak, NZ$ falls ahead of dairy auction
[SYDNEY] The Australian dollar held near a 3-1/2 month peak on Tuesday as traders waited on fresh catalysts from a slew of data and central bank events, while the New Zealand dollar was subdued ahead of a global dairy auction.
The Australian dollar was 0.2 per cent lower at US$0.7670. It went as far as US$0.7732 last week, a level last seen in November, on a string of bright economic data and a brisk rally in the price of iron ore - the country's top export earner.
The Reserve Bank of Australia (RBA) also sounded optimistic about the prospects of the country's economic growth when it held rates at record low this month, minutes of its February meeting showed.
But analysts still expect the Aussie to be trapped in a US$0.7580/US$0.7720 range in the near term. "It feels like all the good news might be baked into the cake," said Greg McKenna, chief market strategist at AxiTrader. "With the bulls' exhaustion and not much data to surprise the market, the Australian dollar rally is at a standstill."
Notably, the Aussie has outperformed the greenback since the beginning of 2017, rallying 6.6 per cent compared with a near 1 per cent fall in the US dollar index in the period.
Investors are looking ahead to data on wages growth and construction work due Wednesday, followed by business investment and two appearances by governor Philip Lowe later in the week. "Traders are a little reluctant to push too hard just yet," Mr McKenna added.
Elsewhere, the Aussie hit a near four-month high on its New Zealand counterpart, while staying close to a two-year high on the euro and a one-year peak on the yen .
The New Zealand dollar hit a one-week low of US$0.7155 on Tuesday. It last stood at US$0.7162 from a high of US$0.7199 touched in the previous session.
Traders will keep a close eye on the results of a global dairy trade auction held later in the day.
Based on futures market pricing, analysts expect dairy prices to have dipped, which would give both economists and farmers some jitters around the recovery of New Zealand's largest goods export earner.
The Kiwi is down about 2 per cent so far this month, with most of that fall coming after the Reserve Bank of New Zealand signalled it would keep rates at a record low for two years, going against bets of a rate hike later in 2017.
New Zealand government bonds were flat with yields largely unchanged.
Australian government bond futures eased, with both the three-year bond contract and the 10-year contract down 2 ticks at 97.94 and 97.16 respectively.