Australian dollar near 11-month peak, NZ dollar hits resistance

[SYDNEY] The Australian dollar held near 11-month peaks on Thursday as surging prices for oil and iron ore boosted risk appetite, while its New Zealand counterpart was repelled by stiff chart resistance.

The Australian dollar was steady at US$0.7805, having climbed to an 11-month peak of US$0.7830 on Wednesday. It has gained more than 2 cents this week and made successive cyclical highs.

Next major resistance was found at US$0.7849 and a break would target the May 2015 peak of US$0.8164.

Driving the gains was a rousing recovery in iron ore, Australia's single biggest export earner, which hit 10-month highs amid a jump in steel prices in China.

The Aussie scaled a one-year peak against the Swiss franc , while the euro dropped to its lowest since July . The common currency is down 7 cents so far this month, in part due to ultra-loose policy in Europe.

The European Central Bank holds its policy meeting later in the session and is widely expected to hold rates unchanged at record lows following last month's bold easing moves.

Across the Tasman sea, the New Zealand dollar edged lower to US$0.6961, having shed 1 per cent on Wednesday. It lost momentum ahead of key resistance around US$0.7075.

The kiwi was still up 0.7 per cent for the week and only just off a 10-month top. "The NZD has been pushed higher in the wave of more positive sentiment for commodities and commodity currencies, despite NZ's terms of trade actually falling," said Jason Wong, senior economist at BNZ, in a research note.

However, a series of strong economic data provided support and the Kiwi began to stabilise around US$0.6970.

Data released on Thursday showed that in the 12 months through March 2016, visitor arrivals hit a record 3.26 million, up 10 per cent from the March 2015 year.

Private surveys by ANZ Bank also showed upbeat readings on job advertisements and consumer confidence.

New Zealand government bonds eased, sending yields 2 basis points higher at the long end of the curve.

Australian government bond futures dropped to one-month lows, with the three-year bond contract off 6 ticks at 97.990. The 10-year contract shed 7.5 ticks to 97.4050 in a bearish steepening of the curve. The 20-year contract fell 5.5 ticks to 96.8500.

REUTERS