SYDNEY/WELLINGTON: The Australian dollar leapt half a cent on Thursday after upbeat retail sales and trade data supported a steady interest rate outlook.
The Aussie jumped to $0.9030, from $0.8983 in early trade, after stops above $0.9000 were tripped and squeezed short positions.
Resistance was found around $0.9040, ahead of key chart barriers at the February peak of $0.9081.
Australian retail sales surged by the most in almost a year in January, while the country's A$1.4 billion trade surplus was the largest in almost three years, far exceeding estimates of A$400 million.
The Aussie had already been buoyed after data on Wednesday showed the economy sped up more than expected in the fourth quarter.
The Aussie flew against the safe-haven yen to 92.52 to show a gain of more than 2-1/2 yen in four sessions. It was pulling closer to key resistance around the 93 level.
The euro fell to A$1.5205 from a peak of A$1.5500 on Monday. It had already been pressured by speculation the European Central Bank could deliver further policy-easing measures later in the session.
Australia's strong data were the clearest evidence to date that record low interest rates were feeding through the economy.
Some dealers, however, remain cautious.
"The data has been a little stronger but it's not anything significant where the RBA is going to be swayed to raise rates," said a trader at a European bank in Singapore, seeing the Aussie unable to sustain a move above 91 cents.
"It's probably solidifying the neutral stance they have already indicated," he said.
"To more above it would have to be shift in policy or something that would be detrimental to the U.S."
The strong data pressured Australian government bond futures with the three-year bond contract off 5 ticks at 97.030. The 10-year contract lost 3 ticks to 95.960.
Swap rates were now pricing in 13 basis points of rate hikes in Australia on a 12-month horizon, up from 2 basis points of cuts early in the week.
The New Zealand dollar held firm at $0.8410, poised for another test of the year-to-date high of $0.8433 which it neared overnight.
"A combination of a higher Australian dollar, a stable Chinese outlook and an easing in risk aversion has seen the New Zealand dollar rise," Bancorp Treasury analysts said in a note.
The kiwi is seen having positive momentum, supported by expectations of central bank rate rises starting next week.
Near-term support is seen at $0.8390 and below that $0.8375. The mid-January high of $0.8433 is the first line of resistance followed by the late October high of $0.8446.
However, the kiwi could not keep pace with the neighboring Aussie, which gained a further 0.5 percent to a one-week high of NZ$1.0730.
The Aussie has gained nearly 1 percent on the kiwi this week, driven by the strong data.
New Zealand government bonds were largely flat.
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