The Australian and New Zealand dollars hopped to their highest in more than two weeks on Thursday, as a round of profit-taking curbed the US dollar, while a run of upbeat data on the global economy underpinned commodity prices. A survey on China's services sector showed activity sped to a 17-month high in December, echoing strength in a range of surveys from Europe and the United States.
The Aussie dollar was flat $0.7285, having rallied 0.9 percent overnight as its US counterpart retreated broadly. Chart resistance lay just ahead at $0.7299, with support around $0.7240/50. The New Zealand dollar was holding at $0.6977 having climbed 0.8 percent overnight, but faces tough chart resistance in the $0.7000/7006 zone.
A dearth of domestic data has seen it track to the whims of the US currency in recent days. The next major release is not until January 26 when the consumer price index for the December quarter is released. The country's central bank holds its next policy meeting on February 9 and is considered certain to keep rates at 1.75 percent, with the market wagering it will remain there for much of the coming year.
New Zealand government bonds rose in price for a second session, with yields falling as much as 8 basis points at the longer end. Australian government bond futures also firmed, with the three-year bond contract up 3 ticks at 97.970. The 10-year contract added 4.5 ticks to 97.2150. Dealers said the US dollar had enjoyed a strong run in the last couple of months and the market was heavily long on the currency, leaving it vulnerable to a sudden pullback on very little news. Indeed, minutes of the Federal Reserve's last policy meeting out on Wednesday should actually have been bullish for the currency given they showed many policymakers saw a risk they might have to raise interest rates faster to head off inflation.
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