The Australian and New Zealand dollars inched up on Tuesday as smiles at the start of the US-North Korea summit boosted risk assets, though trading volumes were low as worries lingered aboutt a global fight over tariffs. The Aussie added 0.1 percent to $0.7615 from Monday's low of $0.7575. The Aussie has been stuck in a$0.7515/7620 range for several days. It broke the band to go as high as $0.7677 last week, but failed to sustain at those levels. The New Zealand dollar climbed 0.1 percent to $0.7030, just above a one-week trough of $0.6998 touched earlier in the session.
"Political theatre could shape market trading as a summit between the leaders of the USA and North Korea begins in Singapore," Michael McCarthy, chief strategist at CMC Markets and Stockbroking, said in a note. New Zealand government bonds eased, sending yields 0.5 basis points higher along the curve. Australian government bond futures were barely changed, with the three-year bond contract down half a tick at 97.770. The 10-year contract added half a tick to 97.1975.
Separate data showed a gauge of Australian business conditions eased in May but stayed near historical highs. In New Zealand, data showed electronic retail spending rose 4.2 percent in May from a year earlier, falling short of analysts' expectations. US President Donald Trump and North Korean leader Kim Jong Un smiled for cameras after 41-minutes of one-on-one talks just months after they traded insults and tensions spiralled in the region over the latter's nuclear programme.
Still, most analysts were worried about the threat of a global trade war after Trump derailed the Group of Seven's efforts to show a united front, backing out of a previously agreed joint communique over the weekend. The action drew criticism from Germany and France, and Trump called Canadian Prime Minister Justin Trudeau "very dishonest and weak."
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