SINGAPORE: The New Zealand dollar hit new highs for the year on Tuesday, and the Australian dollar was near three-week peaks, driven by a burst of optimism about the outlook for Chinese growth and a wobble in the US dollar on a batch of slightly soft data.
The kiwi touched $0.5826 in morning trade, its highest since mid-December and has also broken chart resistance to hit a three-month high against the Aussie.
The Australian dollar touched its highest since February, at just short of $0.64 and was last at $0.6382.
Earlier in March short positions in the New Zealand dollar were the biggest in about a decade, according to CFTC data, and analysts said those were being unwound - particularly as China looks to boost consumption, which would lift NZ exports.
“The … move has the look of a short squeeze about it,” said analysts at ANZ bank, in a note to clients.
China’s retail sales growth quickened in January-February, data showed on Monday, in a welcome sign as policymakers seek to support consumers. US data showed retail sales up 0.2% month-on-month in February, against expectations for 0.6% growth.
The Antipodean currencies face a data test of their own on Thursday, when Australian labour figures and New Zealand growth data are due.
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This week there are also central bank meetings in the US, Britain and Japan, and although no policy moves are expected, policymakers will be contending with a trade war that is gathering pace.
“One of the things we are focused on right now is US policy settings, the impact of these on the global economy and how this flows through to activity and inflation here in Australia,” said Reserve Bank of Australia Assistant Governor Sarah Hunter in a speech in Sydney on Tuesday.
Three-year Australian government bond futures rose two ticks to 96.24 and 10-year futures were steady at 95.57.
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