SYDNEY: The Australian and New Zealand dollars resumed their ascent on Wednesday as falling Treasury yields undermined the US dollar, while domestic data showed a surprise dip in New Zealand's jobless rate.
The Aussie pushed up to $0.7189 and back toward a 17-month peak of $0.7227 reached last week. Immediate support comes in around $0.7107 and $0.7077.
The kiwi dollar edged ahead to $0.6648, but remained short of a recent seven-month top at $0.6716. Support lies at $0.6590 and $0.6575.
Speculation of further Federal Reserve easing has fuelled a steady decline in U.S 10-year yields so that Australian bonds now pay almost 31 basis points more, up from just 16 basis points a couple of months ago.
Two-year Treasury yields were also near historic lows at 0.11% having fallen in the past week amid wagers the Fed might ultimately shift to negative cash rates.
The comparable Australian three-year yield has been relatively steady around 0.27% with the Reserve Bank of Australia (RBA) showing no appetite to ease anytime soon.
The RBA did announce a new round of bond purchases on Wednesday but the modest sum of A$500 million ($359 million) disappointed dealers who had hoped for a more significant amount. The Aussie also drew support from a jump in gold prices to record highs and a further climb in iron ore to a one-year peak. Both commodities are big export earners for Australia.
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