SYDNEY: The Australian and New Zealand dollars were at multi-month highs on Wednesday as surging resource prices and a lurch lower in their US counterpart shattered major chart barriers, sparking a wave of technical buying.
The Aussie was taking in the view at $0.7138 having climbed 1% overnight to a 15-month peak of $0.7147. The sudden surge finally cleared the June top of $0.7069 and opens the way to an April 2019 high at $0.7206.
The kiwi dollar stood at $0.6644 after also gaining 1% overnight to a six-month high of $0.6650. The breach of resistance around $0.6600 opens the door to chart targets at $0.6664 and $0.6755. In the debt market, three-year bond futures dipped a tick to 99.685, and the 10-year contract 1.5 ticks to 99.1050.
Demand remained strong at government tenders with a single buyer taking all A$2 billion of a 2029 offer on Wednesday, even though there were A$6.3 billion of total bids.
The European Union's landmark agreement on a recovery plan continued to support risk sentiment.
"The deal marks a significant step towards European fiscal solidarity which is positive for the European and global economic recovery," said CBA economist Kim Mundy.
That saw the euro spike higher and a broad decline in the US dollar, which was further fuelled by speculation the Federal Reserve might have to ease again given the explosion of US Covid-19 cases and deaths.
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