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Australia, NZ dollars slightly higher after losing ground overnight
[SYDNEY] The Australian and New Zealand dollars were slightly higher Tuesday, paring some overnight losses after the greenback gained ground.
The Australian dollar was at 0.7568 while the New Zealand dollar was at 0.7255, still well off the one-year highs it hit Monday.
The Kiwi faced strong resistance around the 0.7300 level after rallying over the weekend due to a Reserve Bank of New Zealand speech alluding to concerns about rising house prices being a possible reason to hold rates.
"The under-performance of the NZD is consistent with our belief that the market over-reacted to the RBNZ speech on the housing market last week," said BNZ currency strategist Jason Wong in a research note.
The Aussie, meanwhile, still "appears bullish but we note the lack of momentum behind the move," said Matt Simpson, senior market analyst for ThinkForex.
Mr Simpson said there is potential for it to test 0.7600 but "each leg higher is getting smaller and 0.7650 is a huge milestone to overcome in a week of little domestic news." New Zealand government bonds eased, sending yields 4.0 basis points higher at the long end of the curve.
Australian government bond futures continued to consolidate, with the three-year bond contract at 98.490 versus 98.510 on the open.