The Australian dollar held near two-month highs on Wednesday as traders unwound their long positions in the greenback after US president-elect Donald Trump expressed concerns at the currency's strength. The Australian dollar stood at $0.7542, a level not seen since November 14. It shot past a key resistance of $0.7525 in the previous session when it posted its biggest daily percentage gain since early September.
The New Zealand dollar hovered near one-month highs at $0.7203, after posting its largest daily percentage gain in four months. The Aussie is now up nearly 5 percent so far in January, making it one of the best performing major currencies this year. That is a marked turnaround from late December when it hit a seven-month trough of $0.7160 as the US dollar rode high on wagers that Trump's policies would stoke US inflation.
Elsewhere, the Aussie held at one-week lows on the pound, after skidding 1.5 percent in the previous session following a speech by British Prime Minister Theresa May on plans to leave the European Union. The New Zealand dollar too fell 1.3 percent against the British pound. However, it outperformed versus other currencies, fuelled by an auction in which global dairy prices inched up following losses in two previous auctions.
New Zealand government bonds gained, sending yields 3.5 basis points lower at the long end of the curve. Australian government bond futures were mixed, with the three-year bond contract unchanged at 98.00. The 10-year contract rose 2.5 ticks to 97.295.
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