The Australian dollar edged up on Monday after news China's economy had grown slightly faster than economists had forecast, while the New Zealand dollar held steady. The Australian dollar jumped as far as $0.7290, from $0.7245, after data showed China's GDP grew 6.9 percent, versus expectations of 6.8 percent.
The Aussie is sensitive to news out of China, Australia's key export market. The Aussie was last at $0.7257, where it started the session, as the data was not strong enough to shake out bearish positions. Resistance was seen at the recent two-month high of $0.7382, with support at a key retracement level around $0.7235. The next focus is the minutes of the RBA October policy meeting due out on Tuesday.
"Interest will be if the minutes indicate whether the RBA is more concerned about the global growth outlook and the extent of any negative spill-over into the Australian economy," said Elias Haddad senior currency strategist, at Commonwealth Bank. The RBA held rates steady at a record low of 2.0 percent earlier this month but interbank futures pricing have narrowed the odds of an easing. They give a one-in-three chance of a cut at its next meeting on November 3, from one-in-five last week, while they are fully priced for a move early next year.
The kiwi dollar was little changed at $0.6801, having eased into the weekend after two failed attempts to break above 69 US cents last week. The currency has rallied about 10 percent from the September 23 trough of $0.6235 and could consolidate if chart resistance at $0.6900 were to hold, traders said. Data on Friday showed currency speculators have become more bullish on the kiwi dollar, with net positions turning positive for the first time in five months.
The kiwi's surge came amid growing views the Reserve Bank of New Zealand will pause at its October 29 meeting, following three rate cuts in a row. At the same time, doubts over whether the Fed can afford to hike rates this year have weighed on the greenback. New Zealand government bonds edged up with yields 2.5 basis points lower at the long end of the curve. Australian government bond futures had a firm tone, with the three-year bond contract up one tick at 98.230. The 10-year contract also added one tick to 97.3850, while the 20-year contract was up half a tick at 96.8450.