SYDNEY: The Australian dollar was bumping up against resistance on Tuesday as an extended rally in Japanese stocks lifted risk sentiment, while the New Zealand dollar kept its nerve before a decision on interest rates.
The Aussie edged up $0.6592, and within a whisker of the 200-day moving average at $0.6598.
The next targets are $0.6625 and $0.6700, with support at $0.6550.
The kiwi dollar was a shade firmer at $0.6025, after probing resistance around $0.6035.
A break would open the way to $0.6097, while support lies at $0.5995.
A batch of Australian economic data showed wages rose by 0.8% in the second quarter, under forecasts of 0.9% and the lowest increase in a year.
Business activity picked up in the latest NAB survey, while price pressures slowly eased. A survey of consumers showed tax cuts were working to brighten the mood, but respondents were still wary of a hawkish Reserve Bank of Australia (RBA).
“The RBA will be somewhat relieved to see wage pressures subsiding,” said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.
“However, absent an improvement in productivity growth, the current pace of wage growth is still a little too strong for inflation to return to target quickly.”
Australia, NZ dollars grapple with risk aversion as US growth fears weigh
The RBA last week warned that, on current assumptions, core inflation was receding too slowly for the bank to consider cutting rates in the next few months.
Markets now imply a 50% chance of a cut in November, and are almost fully priced for a move in December.
American Dollar Exchange Rate