SYDNEY: The Australian and New Zealand dollars stood firm on Friday as the promise of massive US fiscal stimulus brightened the outlook for global growth and resource prices. President-elect Joe Biden on Thursday unveiled a $1.9 trillion package to jump-start the economy.

That was a boon to growth-sensitive currencies such as the Aussie, which held at $0.7774, having stretched as far as $0.7805 overnight. It was up from a $0.7666 low early in the week, and not far from the recent high at $0.7819. It also reached some notable milestones on the cross rates, hitting its highest since late 2018 against both the euro and the yen while breaking major chart barriers.

The kiwi dollar firmed to $0.7218, but struggled to clear resistance at $0.7240. Support comes in at the week low of $0.7148, while the recent peak at $0.7314 stands as a major chart barrier.

Australian 10-year yields edged up to 1.09% but US yields rose even more so the spread between the two moved to -3 basis points. It had been as wide as +11 basis points in December.

The Australian government on Friday confirmed it would borrow A$230 billion ($178.71 billion) in the 2020/21 fiscal year, much lowered than feared when the pandemic first struck last year.

It also planned to sell a new Nov. 2032 bond line by syndication, extending a run of record offers that have drawn strong demand from overseas funds. The US currency was also undermined by a dovish outlook from Federal Reserve Chair Jerome Powell, who showed no inclination to taper asset purchases anytime soon.

The prospect of more US borrowing dented Treasuries and saw local bonds outperform. A surprisingly brisk recovery in the domestic economy means the Australian government needs to borrow a lot less than first projected.