WELLINGTON/SYDNEY: The Australian and New Zealand dollars hit multi-week highs against a broadly weaker yen on Thursday, underpinned by solid risk appetite as markets saw some encouraging signs in a batch of Chinese economic reports.
The data came a day after talk of a credit line for Spain and Moody's decision to maintain the country's investment grade rating helped fuel demand for riskier assets globally.
The Aussie rose 0.2 percent to a 2-1/2 week high of $1.0397 , extending Wednesday's rally of more than 1 percent. It has surged over a full cent in just the past two sessions, leaving this month's trough of $1.0145 but a distant memory.
Having survived the downside test, traders said the market could now try to push the Aussie back above $1.0500 and maybe even the September peak of $1.0624.
Late in the local session, the New Zealand dollar traded at $0.8213, flat on the day but holding near a one-week high of $0.8226 hit in offshore trade. It enjoyed technical support around $0.8157, where its 55-day moving average lay.
Data on Thursday showed the world's second biggest economy, also a key export market for both Australia and New Zealand, grew 7.4 percent as expected.
However, industrial output, retail sales and urban investment were all ahead of forecasts, offering hope the worst of the slowdown may be over.
"The latest Chinese economic data readings were either in line or slightly above expectations. The good news is that there are no signs of the economy stalling. And for Australia and the world economy generally, that is a very positive development," said Craig James, chief economist at CommSec.
"Today's Chinese economic data will serve to support the Aussie dollar near US$1.0300/0500."
But some in the market doubted the kiwi would make much headway in the near term, after a low reading of New Zealand consumer prices earlier this week bolstered the view that domestic rates would stay at 2.5 percent for months to come.
"The topside could be tough going for the kiwi, as some of the rate support has crumbled," said Mike Jones, currency strategist at BNZ, recommending that investors sell the kiwi on a rise to $0.8275.
Against the yen, both Antipodean currencies gained about 0.2 percent to multi-week highs around 82.31 and 65.10 as the Japanese currency suffered broadly on improved risk appetite and growing speculation of more Bank of Japan stimulus.
The euro lost ground against both the Aussie and kiwi. It slipped to A$1.2596, breaking below an uptrend channel drawn from the August lows in a bearish technical signal for the single currency.
New Zealand government bonds lost further ground as safety demand diminished, sending yields as much as 7 basis points higher along the curve.
Australian bond futures languished at their lowest in nearly a month. The three-year contract fell 0.10 points to 97.450, and the 10-year contract slid 0.11 points to 96.860.
Comments
Comments are closed for this article.