The Australian and New Zealand dollars proved surprisingly resilient on Friday after President Donald Trump doubled down on his tariff tit-for-tat with China, sandbagging US stocks and risk assets in general.
Trump said late Thursday he had instructed US trade officials to consider $100 billion in additional tariffs on China, fuelling an already heated trade dispute between the world's two biggest economies.
The Aussie dollar fell as much as 30 ticks to $0.7658 immediately after the news, but found solid support around $0.7650 as it has done for more than a week now. As the session wore on, the Aussie clawed back up to $0.7687 as the market awaited a response from China, though the country is on holiday on Friday.
The price response was much the same from the kiwi dollar, which initially dipped to $0.7256 before steadying at $0.7266. That left it with a gain for the week of 0.2 percent.
The currency had spent the week bouncing around within a relatively tight range, as global risk sentiment waxed and waned on headlines over the trade dispute between the US and China. The next major test for both currencies will be US payrolls data for March due later Friday. Key will likely be wages since a high number would rekindle talk of faster US rate hikes and further erode risk sentiment.
New Zealand government bonds eased, sending yields 1 basis point higher at the long end of the curve.
Australian government bond futures edged up a tick as sovereign bonds benefited from the latest trade rumblings. The three-year bond contract added 1 tick to 97.830, while the 10-year contract rose half a tick to 97.3250.
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