SINGAPORE: The Australian and New Zealand dollars paused a sparkling rally on Friday as commodity prices cooled and as a sharp selloff in Antipodean bond markets eased with the Reserve Bank of Australia stepping in to defend its yield target. The Aussie was last 0.1% higher at $0.7472, supported by news that embattled developer China Evergrande would avoid default by finding funds for an overdue payment and by the end of a long COVID-19 lockdown in Melbourne.

The kiwi ticked up 0.1% to $0.7166, though it was smarting after suffering its sharpest drop in a fortnight on Thursday.

Both currencies had withdrawn sharply overnight from multi-year peaks made against the yen. The pullbacks halted a weeks long rally that has squeezed out short sellers and carried the Antipodeans more than 3% higher on the greenback.

"At this stage it looks more like a rebalancing rather than the start of a fresh downtrend," said analysts at ANZ Bank in a note, adding that the kiwi could remain supported. However, in Australia the RBA fired a warning shot to markets that had begun to challenge the bank's insistence it would keep rates steady until 2024.