WELLINGTON/SYDNEY: The Australian and New Zealand rose on Monday as a broadly weaker US dollar gave a boost to riskier assets, while the prospect of super easy monetary policies in Europe and United States benefited government bonds.
The Aussie edged up to $1.0325, from $1.0287 early, while the kiwi rose 0.6 percent to a session high of $0.8529. Support was seen at $1.0250 and $1.0220, with resistance at $1.0320, ahead of $1.0350.
Still, the Aussie was on track to show a 1.2 percent decline this month, having swung from a three-month peak of $1.0500 to a six-week low of $1.0221. In contrast, the kiwi looked set to post a near 2 percent gain in April.
"The Reserve Bank of New Zealand is looking at rate hikes whereas the Reserve Bank of Australia is looking at a rate cut," said Matthew Johnson, a rate strategist at UBS.
Swap markets imply some risk of a tightening in New Zealand over 12 months against a narrowing of the odds for further easing in Australia.
That has sent the Aussie reeling against its kiwi cousin. It last fetched NZ$1.2089, having plumbed NZ$1.2045 Friday, its lowest in four years.
Johnson said the Aussie dollar deserved to be there based on the monetary policy divergence between the two neighbours. He sees room for further losses.
"If the RBA keeps cutting and the (Australian) mining boom is over and the RBNZ starts hiking, then it can go back to $1.1500 or so, where it has not been since 2008."
Government bonds took the spotlight on Monday amid growing speculation of further easing in the euro zone and continuous bond buying from the US Federal Reserve.
Australian and New Zealand bonds pay among the highest rates in developed countries even after their recent decline.
Ten-year yields on Australian government bonds fell to five-month lows of 3.08 percent, while those of New Zealand hovered around 3.22 percent, near their lowest since 1985.
Likewise, Australian debt futures scaled multi-month highs with the yield curve flattening. The three-year contract rose as far as 97.470, the highest since mid-November and was now targeting 97.524, the 76.4 percent of the October-March decline.
The 10-year contract rose to 96.955, the highest since December with key resistance seen at 96.95, the 61.8 percent retracement of the June-March fall.
Against the yen, the Aussie and kiwi consolidated at 100.73 yen and 83.13 yen , with market activity dampened by holidays in Japan and China.
Both currencies made sharp gains this month the kiwi a clear winner, showing a jump of more than 5 percent so far in April. The Aussie was not far behind with a near 3 percent gain.
The Antipodeans had touched five-year highs on speculation the money created by the BOJ will eventually find a home in offshore higher yielding assets.
Elsewhere, the pound held its own near two-month peaks against the Aussie at A$1.5039. It has risen 3.3 percent so far in April, boosted by a better-than-expected GDP reading in the UK last week.
New Zealand government bonds rose, with yields as much as 3.5 basis points lower.
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