The Australian and New Zealand dollars held hefty gains on Thursday as investors toyed with the idea of an early end to US rate hikes, a radical development that would likely be bullish for risk assets, emerging markets and commodities.
Data on Australian business investment also had an upbeat message with a sharp upward revision to spending plans auguring well for continued economic growth. The Aussie dollar was enjoying the view at $0.7299 after climbing 1.1 percent overnight, its best daily performance in a month. Bulls were now eyeing the November top at $0.7338, a break of which would take it to territory last trod in August.
The New Zealand dollar, or kiwi, eased off a touch to $0.6844, having risen 1.2 percent overnight only to meet stiff resistance above $0.6880. In debt markets, bonds held onto their overnight gains with Australian 10-year yields the lowest in a month at 2.62 percent. The three-year bond future was up half a tick at 97.900, as was the 10-year contract at 97.3800.
New Zealand government bonds gained, sending yields 2.8 basis points lower at the long end of the curve. The bounce came after Federal Reserve chair Jerome Powell said interest rates were "just below" neutral - the level that neither stimulates nor drags on growth.
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