SYDNEY/WELLINGTON: The Australian and New Zealand dollars resumed their uptrend on Wednesday as dovish comments from Federal Reserve members undermined the US dollar, while local bonds also managed to outperform their US counterparts.
The Aussie bounced to $0.7775 and away from a $0.7666 low touched at the start of the week. The next chart barriers are $0.7798 and the recent peak at $0.7819.
The kiwi dollar firmed to $0.7230 from Monday’s trough at $0.7148, which now becomes major chart support. Resistance lies around $0.7280 and the January peak of $0.7314.
The US currency took a knock when a couple of Fed presidents played down the risk of an early tapering of asset purchases, helping spark a rally in Treasuries.
That was mirrored in the Australian bond market where 10-year yields eased a touch to 1.09%, from a seven-month top of 1.118%.
With three-year yields pinned near 0.1% by buying from the Reserve Bank of Australia (RBA), the yield curve has steepened markedly in recent weeks.—Reuters
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