The Australian dollar paused near three-week highs on Thursday and its New Zealand cousin was a shade firmer, but trading was cautious on worries a tariff dispute between the United States and China was far from getting resolved.
A senior Chinese official said on Thursday Beijing will not hesitate to fight back if the United States escalates trade tensions, warning that Chinese President Xi Jinping's pledge to cut import tariffs is not a concession to Washington.
The Australian dollar eased 0.1 percent to $0.7753 from a three-week high of $0.7772 touched earlier in the day. In New Zealand, the kiwi dollar was up 0.1 percent at $0.7368, not far from Wednesday's peak of $0.7378 and key resistance at $0.7440.
The kiwi was helped by robust electronic retail card spending which rose 6 percent in March from a year earlier, almost doubling from the previous month, a sign of strong consumer spending. New Zealand government bonds eased, sending yields 2 basis points higher at the short end of the curve.
Australian government bond futures were flat, with the three-year bond contract at 97.829 and the 10-year contract at 97.31. Earlier this week, investors took some solace from Xi's pledge to open China's economy further and lower import duties on goods such as cars.
US President Donald Trump responded in a tweet saying he was "thankful" for Xi's kind words on tariffs and access for US automakers, as well as his "enlightenment" on intellectual property issues.
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