You are here

Australian, NZ dollars mark time, underpinned by China news

[SYDNEY] /WELLINGTON, Oct 16 (Reuters) - The Australian and New Zealand dollars trod water on Monday with investors content to consolidate recent gains, while more upbeat economic news from trading partner China underpinned sentiment toward the commodity-heavy currencies.

The Aussie dollar was a fraction softer at US$0.7874, after rallying 1.6 per cent last week only to run into resistance around US$0.7900. The kiwi was a shade firmer at US$0.7178, having put on 1.1 per cent last week.

Supporting the Aussie was a second session of gains for iron ore, the country's single biggest export earner, amid rising prices for steel in China.

Data out on Monday showed China's producer prices rising at a rapid 6.9 per cent annual pace in September, largely driven by strength in commodities.

sentifi.com

Market voices on:

China's central bank governor predicted the economy would grow a brisk 7 percent in the second half of this year, accelerating from the first six months and defying fears of a slowdown.

China publishes its third-quarter gross domestic product number on Thursday, with economists on average expecting growth of 6.8 per cent.

The main domestic event for the Aussie will be jobs figures for September on Thursday where analysts forecast a smaller rise of 15,000 following August's outsized gain of 54,200.

In New Zealand, investors are still waiting to see the shape of its next government.

Acting Prime Minister Bill English said on Monday it could take until the end of the week to confirm a government following an inconclusive election last month.

"The immediate focus remains the formation of a government, and the ongoing lack of clarity is likely to cap topside moves today," said Con Williams, economist at ANZ Bank, in a research note.

Also on investors' radar was third quarter inflation data due out on Tuesday. Analysts polled by Reuters expected annual inflation of 1.8 percent, higher than the Reserve Bank of New Zealand's (RBNZ) August prediction of 1.6 per cent.

Nevertheless the RBNZ was not expected to waiver from its determination to keep rates on hold at a record low of 1.75 percent until the end of 2019.

New Zealand government bonds gained, sending yields 3.5 basis points lower at the long end of the curve.

Australian government bond futures also firmed, with the three-year bond contract up 2 ticks at 97.880. The 10-year contract rose 2.5 ticks to 97.2050.

REUTERS