The Australian dollar extended overnight gains after an upbeat outlook from Reserve Bank of Australia (RBA) Governor Glenn Stevens dampened expectations for further interest rate cuts, sending bond futures toward three-month lows. The Aussie rose as high as $1.0756 as Steven's comments prompted markets to speculate the RBA may hold interest rates at 4.25 percent for the next couple of months at least. It was last at $1.0743.
The New Zealand dollar gained 0.3 percent on the day to a session high of $0.8377, having clawed back from a low of $0.8264 hit on Thursday. It struck a near six-month high of $0.8429 on Monday. Against the Aussie, the kiwi was steady at NZ$1.2805. The Aussie recovered from a slide to NZ$1.2727 earlier in the week, its weakest since early October.
"The testimony was important in reinforcing the view that the RBA probably will not cut rates to the same degree as the market had expected," said Andrew Salter, a strategist at ANZ. Immediate technical support was seen at $0.8322, the kiwi's 21-day moving average.
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