SYDNEY, July 15 (Reuters) - The Australian and New Zealand dollars edged higher on Wednesday as progress on a COVID-19 vaccine buoyed U.S. equities, while details of a bumper Aussie bond sale showed strong demand from foreign buyers.
The Aussie added 0.3% to $0.6998 AUD=D3 but struggled to break resistance around $0.7020, ahead of the June peak at $0.7069. Support comes in around $0.6965 and $0.6925.
The kiwi dollar firmed 0.2% to $0.6552 NZD=D3, though it also faces tough resistance in the $0.6590/0.6600 area. Support lies at $0.6545 and $0.6510.
The Aussie has been wedded to U.S. stocks in recent weeks as a barometer of risk appetite and moved higher with S&P 500 futures ESc1 on news Moderna Inc's MRNA.O experimental vaccine for COVID-19 showed early progress.
Domestic events were not so promising, as a survey showed consumer sentiment had been shaken by the lockdown of Melbourne amid a fresh coronavirus outbreak.
That added to the case for the government to keep pumping stimulus into the economy and not scale back employment support in September as initially intended. An update on its budget plans is due on July 23.
"The recent outbreak will remind households and businesses alike that the virus will not disappear anytime soon," said CBA economist Belinda Allen.
"The likelihood that both JobSeeker and JobKeeper will need to be extended in some form, as well as other new policy measures are rising."
The Aussie enjoyed a tailwind from Tuesday's huge A$17 billion ($11.87 billion) sale of a new Australian 2025 bond line which drew A$50.6 billion in bids.
Details of the offer showed 45% on the debt went to offshore investors, mainly in Asia ex-Japan and the UK. Among the buyers, fund managers took 27%, hedge funds 23% and central banks 8%.
The issue boded well for the sale of a new 2051 bond line due in the week of July 27.
"We expect anywhere between A$4-8 billion of the ACGB 06/51s to be issued with the bulk of the interest to come from North American and UK fund managers," said Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities.
"The long end is extremely attractive on an FX hedged basis - the pick up over foreign bonds is at or near record wides thanks to falling AUD hedge costs."
Australian 10-year bond futures YTCc1 firmed 2 ticks to 99.0900, but have had trouble clearing resistance around 99.1500.
($1 = $1.4320 Australian dollars)
(Reporting by Wayne Cole; Editing by Rashmi Aich)
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