Aussie & NZ dollars surge on Europe debt deal

On Friday 28 October 2011, 8:37

WELLINGTON/SYDNEY, Oct 28 (Reuters) - The Australian and New Zealand dollars held near multi-week highs early on Friday, having staged an eye-watering rally overnight on the back of a broad rally in risk assets after Europe struck a deal to tackle its debt woes.

* Aussie at $1.0718 , after surging more than 3 pct on Thursday -- its biggest daily move in 16 months -- to an eight-week high of $1.0753.
* Aussie has easily taken out several key resistance levels, putting it on track to test the Sept. 1 peak of $1.0765. Support seen at $1.0620, then $1.0567.
* The NZ dollar at $0.8222, having scaled a five-week high of $0.8231 following a 2.8 pct rally -- its biggest one-day gain in 16 months.
* Kiwi may pull back to $0.8183 for interim support, with $0.8241 capping the top side.
* Markets cheered after euro zone leaders announced a deal to contain the currency bloc's two-year-old debt crisis. The deal included an agreement under which private banks and insurers would accept 50 pct losses on their Greek debt holdings in the latest bid to cut Athens' 360 billion euro debt load to sustainable levels.
* The news sent the euro to a seven-week high against the greenback. Wall Street up more than 3 pct, the CRB commodity index, gold, copper and oil all jumped. But safe-haven assets like U.S. Treasuries tumbled.
* Against the yen, Aussie was at 81.42 yen , having hit a seven-week high of 81.61. Kiwi at 62.47 yen , after rallying to a five-week high of 62.53.
* Aussie steady at NZ$1.3030, holding not far from a 4-1/2 month high of NZ$1.3125 hit earlier this week.
* No major data due in Australia and NZ Friday.
* NZ government bond prices <0#NZTSY=> fall as risk appetite improves, with local yields around 10 bps higher along the curve.
* Australian debt futures also under pressure, with the three-year contract 0.12 points lower at 95.990 and the 10-year down 0.11 points at 95.365. (Australia/New Zealand bureaux)

Thursday, 27 October 2011