SYDNEY/WELLINGTON: The Australian dollar traded near one-week highs on Monday as its U.S counterpart slipped with few expecting a Federal Reserve interest rate hike this week.
A A$9.7 billion ($7.30 billion) sale of the Port of Melbourne to a group involving U.S. and Canadian players also boosted sentiment and underscored the strong appetite for Australian assets.
The Australian dollar rose 0.57 percent to $0.7536, its highest level since Sept. 13. Traders are looking at a break above $0.7567 for further gains in the currency.
"You have a few people getting a little bit excited about the Fed meeting saying the rates are not going to go up," said Chris Weston, chief market strategist at IG Markets.
Interest rate futures imply a 12 percent chance of the Fed raising interest rates this week, according to CME Group's FedWatch Tool.
"You're also seeing all commodity currencies doing well today," he added. "And, there is a bit of yield play or carry-trade going on too." Oil was the biggest mover in commodities rising around 2 percent.
The Aussie is up about 3.5 percent this year, thanks in large part to offshore interest in carry trades - where investors borrow at low rates in yen or euros to buy higher-yielding assets.
Apart from the Fed, investor focus will also be on the Bank of Japan's policy meeting on Sept. 20-21.
In Australia, the central bank will release the minutes of its September meeting on Tuesday. The Reserve Bank of Australia's new governor Philip Lowe will appear before a parliamentary economics committee on Thursday, his first official appearance as chief.
The New Zealand dollar was also higher at $0.7301, after falling 0.6 percent on Friday. The kiwi has been trapped in a tight band of $0.7238 and $0.7331 in the last four sessions.
Local data continues to point to a strong economy, with consumer confidence edging higher and strength in the services sector. The kiwi may also get a boost should global dairy prices continue to storm higher at this week's auction.
New Zealand government bonds gained slightly, with yields 1.5 basis points lower at the short end and unchanged at the long end.
The Reserve Bank of New Zealand announces its latest policy decision on Thursday and is widely expected to hold rates at 2 percent after a cut in August.
Of 17 economists polled by Reuters, 16 forecast the central bank to stand pat while one tipped a 25-basis-point rate cut to 1.75 percent.
Australian government bond futures eased, with the three-year bond contract down 3 ticks at 98.410. The 10-year contract slipped 2 ticks to 97.865.
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