The New Zealand dollar slipped on Friday, weighed by weak inflation and views the central bank was in no rush to tighten policy, while its Australian counterpart consolidated below four-month highs during a quiet holiday trading period. The kiwi dollar edged down 0.1 percent to $0.7318, despite a weaker greenback, as investors took a gloomy view of the country's tepid fourth quarter inflation. The surprisingly weak consumer price index (CPI) data released on Thursday had knocked the currency off its four-month high of $0.7435.
Still, the kiwi was poised to post a modest rise of 0.2 percent for the week, its seventh straight week of gains. The Aussie break through resistance of around $0.8030 on Thursday, rising as high as $0.8119 overnight. But the currency had pulled back and returned to trade around $0.7305 during quiet trade with markets mostly closed for the Australia Day public holiday. The currency was set for a 0.4 percent rise on the week.
Australian government bond futures eased, with the three-year bond contract up 0.5 ticks at 97.75 and the 10-year contract rising 0.2 ticks to 97.17. New Zealand government bonds gained, sending yields one basis points lower along most of the curve. "Broad US dollar weakness will limit New Zealand dollar downside, though the currency will spend a few days nursing losses after the lower than expected Q4 CPI," Westpac strategists said in a research note.
The US dollar had suffered heavily after the United States' top Treasury official this week said a weaker greenback was good for the country, giving a green light to speculative sellers.
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