The Australian dollar held its own on Thursday, despite the greenback hitting a 7-week high elsewhere, as optimism over global growth underpinned equities and commodity prices. The Australian dollar stood at $0.7658, down a slight 0.2 percent. It traded in a $0.7605/0.7731 range for all of February, ending the month 0.9 percent higher even as the US dollar index climbed 1.6 percent in the period.
The Aussie stood near 2-week highs on the yen and a 1-1/2 month peak on the pound. It rose to its highest in 7-1/2 months against its New Zealand counterpart. The New Zealand dollar stood at $0.7141, not far from a six-week low of $0.7100 touched as the greenback rose on speculation the US Federal Reserve would lift rates as early as this month.
New Zealand government bonds eased, sending yields 3 basis points higher at the long end of the curve. Australian government bond futures were mixed, with the three-year bond contract unchanged at 97.95. The 10-year contract was down half a tick at 97.1650. The Aussie also took in its stride domestic data showing a smaller-than-expected trade surplus of A$1.3 billion in January.
Exports fell 3 percent while imports rebounded sharply, though the quarterly current account might still edge into the black for the first time since the mid-1970s.More important were Wednesday's figures showing the economy turned around in the fourth quarter to extend its 25 years of uninterrupted expansion. Surveys also showed China's factory activity expanded at a fast pace in February, likely underpinning demand from Australia's No.1 trading partner.
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