SYDNEY: The Australian and New Zealand dollars advanced to new multi-month highs against the greenback on Thursday as local benchmark yields climbed, the U.S. dollar weakened, and investor optimism drove demand for risk-friendly currencies. The Australian dollar was last at $0.7534, up 0.3% to a three-month peak, while the New Zealand dollar was at $0.7219, up 0.19% to its strongest in four months.

The kiwi "retains upward momentum," wrote analysts at Westpac in a note, since, "The U.S. dollar has retreated, global risk sentiment is rising, and NZ-U.S. yield spreads have risen significantly."

As for the Australian dollar "we remain torn between the near-term positives of super strong commodity prices and a weakening U.S. dollar, and the medium term view that global growth will slow sharply into Q4," they said. Both Antipodean currencies have rallied strongly from one-month lows hit a few weeks ago when fears about slowing economic growth were high on investors minds, driving a rush for safe havens, especially the dollar.

This has since reversed, with the dollar at a three-week low against a basket of its peers and significant weakness in the yen. The Aussie dollar is at its strongest against the Japanese currency since February 2018.