SYDNEY: The Australian dollar rose on Monday after data showed China extended its economic recovery, and the New Zealand currency also posted gains following a landslide election victory for Prime Minister Jacinda Ardern during the weekend.
The Australian dollar, which correlates closely with the Chinese economy, rose 0.2% to $0.7091 against the greenback, recovering a fraction of the previous week's losses.
The New Zealand dollar edged up 0.3% at $0.6620 after falling about 1% last week and ending Friday's session at $0.6605. With polls ahead of the election flagging Ardern's win and no major new policies unveiled, the kiwi's reaction has been somewhat subdued, analysts said.
However, "there's potential for further modest gains during the day (and) the multi-month outlook remains positive, with potential to rise towards 0.6800 - the top of a multi-month range," Westpac strategists said. Australian government bond futures were slightly lower on Monday, with the three-year bond contract down half a tick at 99.83, ahead of the release of Reserve Bank of Australia (RBA) monetary policy minutes on Tuesday.
The 10-year contract was 2.5 ticks lower, at 99.25. RBA Governor Philip Lowe last week said Australia's 10-year yields were higher than "almost everywhere in the world" and so the bank was studying whether it should buy more government bonds to push yields lower. China's economy grew 4.9% in the third quarter compared with a year earlier, extending its economic comeback, while monthly indicators pointed to a pickup in momentum too.
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