27/03/2014 10:59 AST
SYDNEY/WELLINGTON: The Australian dollar held firm near four-month peaks against its US counterpart and the euro on Thursday, while another set of upbeat data gave the high-flying New Zealand dollar a boost.
The Aussie remained sturdy at $0.9224, not far from a four-month peak of $0.9245 set overnight.
On a trade-weighted basis, it rose to 70.5, its highest since November.
The next level of resistance is found at the 61.8 percent of the October-January fall at $0.9340, with a review of the daily moving average suggesting the Aussie is trending higher.
Much of the strength came after markets interpreted comments about the local economy made by Reserve bank of Australia Governor Glenn Stevens as bullish.
"With interest rates off the table and the RBA shifting its jawboning of the exchange rate to the housing market, it's a distinct change of tone," said Michael Turner, a strategist at RBC Capital Markets.
The Aussie has gained three cents since the RBA shifted its monetary policy stance to neutral from an easing bias earlier this year. "The RBA is certainly not trying as hard as they were to tone down the currency," Turner added.
On Wednesday, Stevens skipped a chance to call the currency "uncomfortably high", as the central bank has done in the past, choosing instead to caution investors against getting carried away in Australia's frothy housing market.
The Aussie received another lift after European policymakers hinted at radical stimulus measures there to ward off deflation and tackle a surging currency.
The comments sent the euro to its lowest in four months against the Aussie to be last at A$1.4956.
The single currency dropped around nine cents since a peak in January.
The New Zealand dollar was firm at $0.8613, near a one-week high of $0.8621 hit in offshore trade, when the kiwi had capitalised on broad gains in the Aussie.
The currency was bolstered by strong New Zealand trade data, which added to optimism about the country's economy.
New Zealand posted a NZ$818 million trade surplus in February, its biggest since April 2011, due to a rise in dairy exports to China, its largest trading partner.
Against a currency basket, the kiwi traded at 80.20, not far from a post-float high of 80.43 hit last week.
It faces resistance at $0.8641, an 11-month high reached last week. As prospects of rising interest are already priced into the currency, market participants believe the kiwi will struggle to make further significant gains.
"For now AUD/USD re-rating is dragging NZD higher, but with NZD/USD already in rarefied air, further gains will be hard fought," ANZ analysts said in a note.
Also capping the kiwi was its underperformance versus the Aussie, which rose to around NZ$1.0740, its highest level in nearly three weeks.
Trendline support was seen at $0.8585, while additional support lay at $0.8544, a high hit in October. Market participants said any upside would be capped by offers around $0.8650.
New Zealand government bond prices eased, nudging yields 1.5 basis points higher at the short end of the curve. Australian government bond futures edged up, with the three-year bond contract up 1 tick at 96.950.
The 10-year contract added 5 ticks to 95.930.
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