The Australian and New Zealand dollars took a breather on Friday against their US counterpart after running into light profit-taking, while staying on track for solid weekly gains versus the euro. The Australian dollar eased to $0.7712, from a three-month peak of $0.7741 on Thursday. Since November, it has met a wall of resistance around $0.7707-$0.7778. Yet, it was poised to show a 0.4 percent weekly gain, partly due to broad US dollar weakness.
The Antipodean currencies also outperformed a soggy euro, showing weekly gains of 0.8 percent. The euro stood at A$1.3719, having gone as deep as A$1.3619 on Wednesday, the lowest in three years. The common currency is down 3.6 percent so far this month, and if sustained, it would be the largest drop in more than a year. The euro has been hit on fears about anti-European Union rhetoric from right-wing French presidential candidate Marine Le Pen. The two-round elections will be held in April and May.
The euro stood at NZ$1.4644 and a break of NZ$1.4522 would be the lowest in two years. Across the Tasman sea, the New Zealand dollar edged lower to $0.7221, but within sight of a two-week peak of $0.7246 touched the previous day. Against its Kiwi cousin, the Australian dollar held at NZ$1.0666, on track for a monthly gain of 2.8 percent. If sustained, it would be the biggest in more than a year. New Zealand government bonds gained, sending yields 4.5 basis points lower at the long end of the curve. Australian government bond futures rallied, with the three-year bond contract up 4 ticks at 98.010. The 10-year contract gained 5.5 ticks to 97.2400 while the 20-year contract added 5.5 ticks to 96.3600.
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