The Australian dollar rose again on Friday to hit a near 2-1/2-month high after data showed China's economy expanded at a faster-than-expected pace in the fourth quarter of 2016. China is Australia's No.1 trading partner while the Aussie is often seen as a liquid proxy for the yuan. The Australian dollar was last up 0.2 percent at $0.7577 after briefly climbing to $0.7589, a level not seen since November 11.
The Aussie is up about 1 percent this week and was on track to clock its fourth straight weekly gain. It is up 5.3 percent in January so far, making it one of the best performing major currencies in the world. Across the Tasman Sea, the New Zealand dollar rose 0.25 percent to $0.7206, its second straight day of gains.
It received an extra boost in early afternoon trading after credit ratings agency S&P affirmed the country's AA rating. The Kiwi touched a peak of $0.7225, its highest since December 14. For the week, it was up 1 percent, on track for its fourth straight weekly gain, but faces stiff chart resistance at $0.7240.
New Zealand government bonds eased, sending yields 4.5 basis points higher at the long end of the curve. Australian government bond futures were weak too, with the three-year bond contract down 1 tick at 97.94. The 10-year contract slipped 3 ticks to 97.18. "I have been fielding more questions about the Aussie's resilience over the past 24 hours than any other currency," said Stephen Innes, senior currency trader at OANDA Australia and Asia Pacific. "Australia (is) an oasis in this politically contentious global environment. In addition to the political stability, yields remain attractive."
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