MSN: Aussie dollar steady as year-end closings eyed
* Aussie holds ground but fails to breach 14-1/2-mth highs
* Thursday's local employment report eyed
* Investors seen playing safe ahead of bonus season
By Koh Gui Qing
SYDNEY, Nov 11 (Reuters) - The Australian dollar held near 14-1/2-month highs on Wednesday as investors shied from big bets in the absence of trading leads, preferring to hold onto gains from the Aussie's 33 percent jump this year ahead of year-end book closings.
The Aussie spent the day in a tight range of $0.9286-$0.9325 with a holiday in the U.S. market further dampening trade. It ended the day at $0.9298 , up from Tuesday's $0.9258 but still failing to breach a 14-1/2-month high of $0.9330.
Some analysts said traders are also reluctant to make changes to their investments in the Aussie for fear it may hurt the overall performance of their portfolios and shrink their bonuses.
"A lot of people are playing with a hands-off approach and they don't want to be married to their trades," said Sue Trinh, an analyst at RBC Capital.
"The Aussie is struggling to break above $0.9330 so it's stuck in choppy trade."
Traders have said hedge funds and model funds were big buyers of the Aussie during its run-up this year that has made it the best performer among most actively traded currencies this year.
The overall tepid mood in markets also held other major currencies within tight trading ranges. The euro failed to breach $1.5060 and the U.S. dollar index <.DXY> hovered around a key level of 74.80/90.
The Aussie was subdued at 83.05 , compared to Tuesday's 83.24.
A raft of data from Australia's top trading partner, China, also did not excite investors because it showed a marked slowdown in loan growth and sluggish trade performance. [ID:nPEK247742]
Now all eyes are on Thursday's Australian employment data. A better-than-expected outcome would fuel speculation the Reserve Bank of Australia may raise interest rates again by 25 basis points in December, and vice versa.
Analysts forecast 10,000 jobs were shed in October, with unemployment edging up to 5.8 percent from 5.7 percent previously.
Australian interest rates are the highest in the developed world at 3.50 percent, and investors are betting on 172 basis points more of rises in the next year.
With expectations Australia will not impose capital controls to stop punters from buying the Aussie, analysts said the local dollar's high-yield allure may shine even brighter in coming months. Brazil's government tried to curb the real's rise last month by slapping a 2 percent tax on inflows into stocks and fixed-income investments. Taiwan also took steps to restrict currency speculation [ID:nTP305449].
"There are few alternative high yield currencies that investors find liquid and safe enough to enter," said Greg Gibbs, an analyst at RBS.
Aussie bond futures were firm. The three-year contract was up 0.01 point at 94.86, and 10-year bond futures were up 0.04 points at 94.375. ----------------(Snapshot at 4:15 p.m./0515 GMT)---------------- FUTURES CASH YIELD 90-DAY BILL 90-DAY BILL (DEC) 95.84 (-0.02) AUD3MOIS= 3.67 (3.67) 3-YR BOND (DEC) 94.86 (+0.01) AU3YT=RR 5.03 (5.06) 10-YR BOND (DEC) 94.375(+0.04) AU10YT=RR 5.66 (5.73) AUD/USD 0.9298 (0.9258) US10YT=RR 3.48 (3.49) --------------------------------------------------------------- AUD VS 2-YR 10-YR *AUD 3-YR/10-YR SPREAD USD +383 (+384) +218 (+223) *FUTURES +0.485(+0.505) CAD +327 (+329) +215 (+222) *AUD 2-YR/10-YR SPREAD NZD +23 (+27) -48 (-12) *CASH +99 (+103) --------------------------------------------------------------- (Reporting by Koh Gui Qing)
