The New Zealand dollar celebrated a fresh four-month peak on Wednesday aided by heightened risk appetite globally, while its Australian counterpart was still wrestling with stifff resistance atop 80 US cents The kiwi was taking in the view at $0.7362, having finally broken the $0.7330 chart barrier after several days of struggle.
"The NZ dollar has been supported by buoyant global risk appetite, recent rises in dairy prices and probably some short-covering activity," said Nick Smyth, a strategist at BNZ. "The US dollar is generally weaker again, with Trump's imposition of tariffs seemingly the latest excuse to sell the dollar," he added.
US President Donald Trump this week slapped steep import tariffs on washing machines and solar panels, a move that stirred fears in Asia of more protectionist measures coming out of Washington. The kiwi faces a domestic hurdle on Thursday with the release of consumer price figures for the fourth quarter.
The Aussie fared a bit better against the unloved US dollar, bouncing to $0.8005 from a low of $0.7957 on Tuesday. Yet it has now spent six sessions trying to break resistance above $0.8030 with no success, leaving it vulnerable to a deeper pullback.
Australian government bonds regained some ground in line with US Treasuries, where strong demand at an auction of two-year paper supported sentiment. The three-year bond contract added 2 ticks to 97.755, while the 10-year contract rose 2.5 ticks to 97.1900. New Zealand government bonds gained, sending yields around 5 basis points lower at the long end of the curve.
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