The Australian and New Zealand dollars held near recent peaks on Friday with further easing by the European Central Bank (ECB) putting them on track to end the week sharply higher against their US counterpart. They were not so lucky against the euro which was swept up in a massive short squeeze after the ECB proved less aggressive than many bears were betting on.
The Australian dollar held at $0.7332, having climbed to an 8-week peak of $0.7365 on Thursday. Heavy resistance was found at the October 12 trend high of $0.7382. The Aussie is up 1.9 percent this week, partly due to its attractive government bond yields which compare with negative rates in Germany and France on the short end of the curve. The euro was last at A$1.4890, having surged from a five-month trough of A$1.4368 on Thursday.
The New Zealand dollar edged down to $0.6675 from a one-month high of $0.6706 set the previous session. It was on track with a weekly gain of 2.1 percent. The euro also rallied hard on the kiwi to reach NZ$1.6363, having gained 2.3 percent overnight. New Zealand government bonds eased, sending yields between 3 and 4.5 basis points higher. Australian government bond futures fell in a bearish steepening of the curve, with the three-year bond contract off 6 ticks at 97.820. The 10-year contract skidded 11 ticks to 97.0200, while the 20-year contract also eased 11 ticks to 96.5200.
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