Aussie loses another bout with 77 US cents barrier, kiwi steady

[SYDNEY] The Australian dollar ticked lower on Thursday as a two-day rally fizzled out in the face of stubborn chart resistance above 77 US cents.

The Australian dollar slipped 0.24 per cent to US$0.7630. It briefly touched a high of US$0.7709 on Wednesday after steady inflation figures only reinforced expectations the Reserve Bank of Australia (RBA) would skip a chance to cut rates at its policy meeting next Tuesday.

However, the Aussie was quick to fall back, marking the fifth time since September that it has failed to hold a beachhead at 77 US cents.

"The fact that the Aussie has collapsed from above 77 US cents in recent months just tells you that rallies are anything but another selling opportunity for traders," said Greg McKenna, chief market strategist at AxiTrader.

"So the buyers had the chance to take it higher but could not beat the bears back from this enduring supply zone."

Earlier, official data showed a 3.5 per cent rise in export prices while import prices fell one per cent. The ratio of the two, considered a proxy for the terms of trade, posted the biggest increase in almost five years.

"A raft of businesses across the agricultural and mining sectors are experiencing rising fortunes with export prices recording solid gains over the past three months," said CommSec Chief Economist Craig James.

"The hope is that commodity producers will spend some of the higher income, lifting revenues of equipment and services businesses across the country."

The Aussie barely moved against the euro or sterling. It fell 0.3 per cent on the yen, after rising each day this week.

The New Zealand dollar was largely flat on Thursday, hovering around US$0.7155 after the country's trade deficit widened in line with expectations.

Thursday's trade data showed a monthly deficit of NZ$1.4 billion (S$1.39 billion).

Investors were treading water until next week when a series of data including employment figures and a dairy price auction, should offer fresh momentum.

New Zealand government bonds eased, sending yields 5.5 basis points higher at the long end of the curve.

Australian government bond futures were down too, with the three-year bond contract off one tick at 98.27. The 10-year contract slipped five ticks to 97.7050, led by rising long-term yields in Europe and the United States.

REUTERS