The AUD/USD moved above parity early in New Zealand as "markets have responded quite positively" after news of EU assistance to recapitalize Spanish banks, "but with Australia on holiday liquidity is quite thin so we are likely to see quite choppy moves in the early hours," says ASB Economist Jane Turner. The pair is at 0.9978 early in New Zealand after touching a high of 1.0009. Turner notes that recent strong data out of Australia has meant that investors have pared back expectations of further rate cuts "which is one factor that is going to continue to provide the AUD with some support this week." While she expects the positive sentiment after the Spain news to continue for the next few days, "we are expecting it to remain relatively short-lived as by the end of the week we are expecting the market focus to return back to the Greek elections." Turner says the AUD/USD has support at 0.9800 and resistance at 1.0200.
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