Australia dlr climbs to 3-month highs on yen, euro



By Wayne Cole

SYDNEY, Oct 13 (Reuters) - The Australian dollar was consolidating broad gains on Wednesday as strength on global commodity prices and rising bond yields gave it a leg up on the yen and euro, where most yields are still sub-zero.

The yen has been further undermined by Japan's reliance on energy imports, while Australia is the world's largest exporter of liquefied natural gas and a major shipper of coal.

That helped lift the Aussie 1.7% for the week so far to 83.40 yen AUDJPY= , after hitting a three-month top of 83.79 overnight. A break of resistance at 82.12 early in the week triggered technical buying with the next target being 84.20.

There was a similar turn in the euro after a loss of support at A$1.5887 EURAUD= last week saw it dive as deep as A$1.5638. That was the lowest since early July and could herald a further retreat to the A$1.5500 area.

The gains in turn helped the Aussie firm to $1.7340 AUD=D3 , having touched a one-month top of $0.7384 overnight.

The New Zealand dollar lagged behind at $0.6935 NZD=D3 , after repeatedly failing to clear resistance around $0.6970.

The Aussie has been on the rise against the kiwi for a couple of weeks now to reach a three-month high of NZ$1.0612 AUDNZD= , well away from its September trough of NZ$1.0270.

Westpac analyst Imre Speizer saw further gains to NZ$1.0700 in part as Australia's mix of commodities was outperforming that of New Zealand, where the major earner is dairy.

Speizer noted markets were already fully priced for a string of rate rises in New Zealand, but were just starting to price in the risk of hikes from the Reserve Bank of Australia (RBA).

Interbank futures 0#YIB: have fallen sharply in the last few days with the market now implying cash rates of 0.38% by December next year, compared to as low as 0.20% a month ago.

Bond yields have also moved sharply higher, even as the RBA insisted no hike was likely until 2024.

Australian 10-year yields AU10YT=RR have climbed almost 40 basis points in three weeks to stand at 1.69%, while the spread to U.S. Treasuries has shifted to +12 basis points from -17 basis points.

Investors are also looking for a rebound in economic activity after a tough third quarter as rapid progress on vaccinations has allowed Sydney to ease lockdown restrictions this week, with Melbourne and Canberra likely to follow shortly.


Editing by Stephen Coates

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