SYDNEY/WELLINGTON: The Australian and New Zealand dollars were edging higher again on Tuesday, shaking off a bout of profit-taking as domestic economic news stayed upbeat and global commodity prices strong. The Aussie firmed 0.3% to $0.7366, having reached a three-month peak of $0.7408 overnight only to meet stiff resistance at the September top of $0.7413. A break there would take it back to levels not seen since mid-2018.
The kiwi dollar pushed back up to $0.7037, having already reached its highest since June 2018 at $0.7051. The currency surged 6% in November and overbought technical signals point to the need for some consolidation. Australia's relative economic success has kept 10-year bond yields up at 0.92%, while US yields have drifted down to 0.85%, widening the Aussie's rate advantage.
Also supporting the currency has been strength in prices for some of Australia's major export earners. Australian economic data were again upbeat with a revival in house prices and home building boding well for economic recovery now the nation is largely coronavirus-free. The Reserve Bank of Australia (RBA) noted the run of better news while leaving rates at 0.1% after its December policy meeting on Tuesday.
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