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Aussie & NZ dollars rally on euro, iron ore up again

Tuesday, 9 Oct 2012 | 5:16 PM ET

WELLINGTON/SYDNEY, Oct 10 (Reuters) - The Australian and New Zealand dollars rallied on the euro on Wednesday as concerns over Spain continued to simmer, while a second session of gains for iron ore brightened the outlook for Aussie export earnings.

* Euro pulls back further to one-week lows against the Antipodeans. Down 0.8 pct on the Aussie at A$1.2618 and well off last week's peak at A$1.2824. It last at NZ$1.5751

on the kiwi.

* The two currencies had less luck against the U.S. dollar which made its own progress on the euro, leaving the Aussie

around $1.0203, from $1.0245 in late trade on Tuesday.

* Support seen around $1.0175, then $1.0150, while sellers lined up around 100-DMA of $1.0251.

* NZ dollar at $0.8170, after sliding to $1.8161 from $0.8230 in late Tuesday trade. Kiwi buyers seen around $0.8150, while $0.8190 may cap the top side for now.

* Kiwi down 1.5 pct vs the greenback so far this month, compared with Aussie's 1.7 pct drop. Markets expect more rate cuts in Australia vs steady rate outlook in NZ.

* Aussie recovers on the kiwi , edging higher to NZ$1.2476, from NZ$1.2431 on Tuesday. The pair hit a one year low of NZ$1.2361 last week.

* In the broader markets, the U.S. dollar and yen higher against the euro on worries about Q3 corporate earnings as debt uncertainty about Greece and Spain debt lingers.

* Wall Street finishes lower on tech companies, while Alcoa

shares up after Q3 results, with muted response in currency markets. The Thomson Reuters-Jefferies CRB index

was up almost 1 pct, with oil higher, gold down while copper flat.

* Spot iron ore prices rose another 6 pct to $117.20 a tonne, bringing its gains this week to 12 pct. The steel-making mineral has now recouped around half of the huge fall suffered in July and August, a major relief for miners as it is Australia's biggest export earner.

* That helped offset gloom from the IMF which said the global economic slowdown was worsening as it cuts growth forecasts for the second time since April.

* Concern about Greece resurfaces after ECB chief Mario Draghi told a European Parliament committee that Greece has made progress on reforming its economy, but has more work to do.

* Australia has a survey of consumer confidence for October which could show some improvement following last week's cut in interest rates. NZ expects the government financial statement for the fiscal year to June 30.

* NZ government bonds start firmer, with yields down 1 basis point along the curve.

* Australian government bond futures flat with three-year contract at 97.650, and the 10-year contract at 97.035.

((Australia/New Zealand bureaux)(+61 2 9373 1800/+64 4 802 7980))

Keywords: MARKETS AUSTRALIA NEWZEALAND/FOREX