SYDNEY: The Australian dollar held near three-week highs on Thursday as a step up in vaccinations and recent encouraging economic data gave investors hope tough COVID-19 curbs would be eased in coming weeks.
The Aussie dollar stood at $0.7365, after rising 0.7% to resistance around $0.7384 overnight. Support lies around $0.7330 and $0.7285.Data on Wednesday showed the Australian economy had avoided a technical recession in the second quarter, spurring gains in the local currency, while a record trade surplus for July added to the better background.
"Positive momentum should continue for the AUD as economic data improves", ANZ Research analysts wrote in a note, adding that June quarter data affirmed domestic demand was solid and would rebound sharply once lockdowns were lifted.
That and a quicker vaccination rollout have helped markets mostly shrug off worries over a widely expected economic contraction in the September quarter.
There was some speculation the downturn could prompt the Reserve Bank of Australia (RBA) to delay tapering its bond buying programme at a policy meeting next week, though the market was split on the chances.
Yields on the Australian 10-year bond eased 3 basis points to 1.21%, after touching a five-week high in the previous session. That took them to 9 basis points below Treasury yields, compared to 5 basis points on Wednesday.
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