SYDNEY, Oct 23 (Reuters) - The Australian and New Zealand
dollars eked out small weekly gains on Friday helped by broad
pressure on the greenback, though analysts expect tight trading
ranges at least until the U.S. presidential elections next
The Australian dollar was last flat at $0.7116,
after running into key chart resistance near a one-week high of
$0.7139 earlier in the day .
The next technical level is seen at $0.7170.
For the week, the currency is up 0.5% following a hefty 2.3%
loss last week pressured by growing expectations of further
policy easing by the Reserve Bank of Australia (RBA).
The New Zealand dollar was slightly weaker at
0.6666. It faces stiff resistance at the October top of $0.6682
and remains well short of the September high at $0.6797.
The kiwi came under pressure after data on third-quarter
inflation came in below expectations, reinforcing views that
deeper monetary easing may come soon.
For the week so far, the kiwi has climbed 0.9%, mostly
making up its prior week losses.
Sentiment in currency trading was generally cautious on
Friday with investors focussed on the U.S. presidential debate
between President Donald Trump and rival Joe Biden, which was
more measured compared with the first debate and hardly moved
Analysts at National Australia Bank expect the Aussie to
trade in a narrow range, "barring a big rise in risk aversion
most likely related to the U.S. elections, in particular if
there is no clear cut outcome very soon after Nov.3 and/or the
result is contested by one or the other candidate."
"Excluding this risk aversion scenario, risk assets can
rally into year-end - particularly in the event of a Democrat
clean sweep and associated promise of large fiscal stimulus -
which would most likely allow the USD downtrend...to resume."
NAB expects the Aussie to hit $0.74 by year-end before
extending to the high 0.70s in 2021.
The rally is expected even as markets wager heavily the RBA
will cut rates to just 0.1% in early November, from the current
0.25% and expand its bond buying to the longer-term debt.
Dealers are talking of around A$100 billion in bond-buying
in five- to 10-year paper as an initial target.
Three-year bond futures fell half a tick to 99.83
while the 10-year contract slipped 3.5 ticks to 99.1500.
(Editing by Shri Navaratnam)