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 month.
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 markets.
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)
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