Australia, NZ dollars gain on robust domestic data

[SYDNEY] The Australian dollar rose for the fourth consecutive session on Monday on data pointed to robust company profits and wage growth.

The Australian dollar rose 0.3 per cent to US$0.7592, nearing a one-week high of US$0.7616 hit on Friday and a key resistance level on the charts.

Data showed that company gross operating profits jumped about 7 per cent last quarter, topping consensus estimates of 2 per cent, while wages and salaries grew 0.8 per cent.

That suggested there was some upside risk for second-quarter gross domestic product (GDP) figures due on Wednesday and only reinforced expectations the Reserve Bank of Australia (RBA) would hold rates at 1.5 per cent at its Sept. 6 meeting.

"We do not anticipate that RBA will cut rates tomorrow. It is likely to want to see more inflation and employment data, and see how the leading indicators play out before reverting to an easing bias once more," said Matt Simpson, senior market analyst at ThinkMarkets.

Mr Simpson expects the Aussie to "convincingly break above" 76 US cents should the RBA hold rates and refrain from an easing bias. The Aussie is up more than 4 per cent this year.

"But whilst we see potential for Aussie to gain in the near-term, we see...prices capped below US$0.77," he added.

The New Zealand dollar rose 0.3 per cent to US$0.7304 on Monday, also aided by strong data.

ANZ Senior Economist Philip Borkin said the Kiwi continues to be sought after because "when you look at what's going on around the New Zealand economy, things look great."

He noted that a 3.2 per cent gain in the ANZ commodity price index in August, on the back of an improving dairy picture, had been well received.

Recent figures also have shown very strong retail sales and home building, and a solid growth in employment.

New Zealand government bonds eased, sending yields 4 basis points higher across the curve.

Australian government bond futures fell too, with the three-year bond contract down 2 ticks at 98.56. The 10-year contract eased 4.5 ticks to 98.09.

REUTERS