$A higher thanks to weaker Kiwi
Market watch top headlines
SYDNEY, Feb 20 AAP
February 20 2013, 5:48PM
The Australian dollar is stronger against the greenback after statements from New Zealand's central bank led currency traders to move their money across the Tasman.
At 1700 AEDT on Wednesday, the Australian dollar was trading at 103.65 US cents, up from 103.29 cents on Tuesday.
ANZ foreign exchange strategist Andrew Salter said the local currency received a boost after Reserve Bank of New Zealand (RBNZ) governor Graeme Wheeler said that institution was prepared to intervene to push down the value of the Kiwi currency.
"The speech was interpreted by the market as bringing the RBNZ as a little bit closer to intervention than previously thought," he said.
Mr Salter said the Australian dollar rose sharply against its New Zealand counterpart following Mr Wheeler's statements, which provided support for the local currency against the US dollar.
He said the local currency would trade in a narrow range ahead of the release of the minutes of the January meeting of the US Federal Reserve's Federal Open Market Committee.
The Fed will release the minutes overnight on Wednesday.
"That will be a big mover and we are just treading water until then," Mr Salter said.
At 1700 AEDT, the Australian dollar was at 96.63 Japanese yen, down from 96.71 yen on Tuesday and at 77.28 euro cents, down from 77.37 euro cents.
Meanwhile, Australian bond futures finished the local session unchanged.
At 1630 AEDT on Wednesday, the March 10-year bond futures contract was trading at 96.440 (implying a yield of 3.560 per cent), the same as Tuesday.
The March three-year bond futures contract was steady at 97.090 (2.910 per cent).
UBS interest rate strategist Matthew Johnson said bond futures prices moved lower overnight on Tuesday following the release of the German data.
The ZEW Centre for Economic Research report showed German economic sentiment in February at its highest level since April 2010.
"The German sentiment data was very good and that definitely helped push yields higher (and prices lower)," Mr Johnson said.
Mr Johnson said that, with futures prices near the bottom of their recent range, prices had increased a little during the local session.
"It's been extremely dead, but it looks like we have found some support around these levels" he said.
By Evan Schwarten