SYDNEY: The Australian and New Zealand dollars rose on Monday, buoyed by improving sentiment following strong earnings results and economic data in the United States.
The Australian dollar climbed to $0.8818, from $0.8788 in New York on Friday, pulling away from a four-year trough of $0.8642 touched earlier this month. Resistance was found at $0.8860.
Data showing new US home sales climbing to a six-year high, combined with Wall Street closing out its best week in nearly two years, prompted investors to unwind Aussie short positions. Underpinning appetite for risk was a rally in Asian equities markets with Australia up 0.7 percent and Japan gaining 0.5 percent.
"The main drivers for the move were positive gains from Wall Street as a semblance of calm overcame global markets," said Stephen Innes, senior trader, at OANDA Asia Pacific.
Also helping was a sharp bounce against the yen supported by returning carry trades where the market borrows at low rates in yen to buy higher-yielding assets, such as the Kiwi and Aussie.
The Aussie stood at 95.23 yen, from a low of 94.08 Friday, having gained 1.7 percent last week. It was the largest such gain in 7 months, but was still down nearly 1 percent in October.
Resistance was found at 95.45 Major events this week for the Antipodean currencies are the Federal Reserve policy meeting and US gross domestic product data.
With better investor sentiment, Australian government bond futures fell. The three-year bond contract fell 4 ticks to 97.390, while the 10-year contract shed 3.5 ticks to 96.670.
The New Zealand dollar was firm in subdued trading with financial markets shut for Labour Day. It was last at $0.7853, from a low of $0.7795 on Friday. It fell 0.7 percent last week and touched a 15-month trough of $0.7708 late September.
Australian government bond futures fell, with the three-year bond contract down 4 ticks to 97.390. The 10-year contract shed 3.5 ticks to 96.670.
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