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Aussie $ unfazed by soggy stocks; life high on euro
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SYDNEY/WELLINGTON: The Australian dollar bounced on Wednesday after drawing steady demand below 91 US cents, helping it withstand losses in Asian stocks which dragged on its New Zealand neighbour.
Pension and mutual funds, exporters, central banks and speculators were all said to be buying the Australian dollar when it lurched below $0.91 in the past 24 hours, keeping it well supported at $0.9160 in late trade.
Traders said Australia's resilient domestic economy underpinned demand. Underscoring that, the Aussie dollar hit lifetime highs on the euro, which took a kick this week after traders seized on resurging fears about Europe's debt woes as an excuse to sell the common currency.
But some analysts warned investors against reading too much into the Aussie dollar's latest resilience.
Robert Rennie, an analyst at Westpac, said trade was subdued and that suggested buyers lacked conviction and the market was circumspect.
In late trade, the euro fell to a lifetime low of A$1.3884, hurt by a late spurt in the Aussie against the US dollar where hedge funds and mutual funds were spotted among buyers.
The NZ dollar was hovering around support levels at $0.7170/80 as investors were less inclined to riskier assets as concerns about the health of European banks resurfaced.
The kiwi also pulled back against the yen, which gained on improved demand for safety, settling back at 59.80 yen from 60.24 yen. It was also lower against the euro at 0.5640 from 0.5664. -Reuters
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