The Australian and New Zealand dollars were heading for a flat finish for the week on Friday as a raft of Chinese economic data either met or beat forecasts, just not by enough to inject much momentum into a stalled market.
While the Chinese economy grew at 6.0% as widely expected, both retail sales and industrial output topped forecasts in a hopeful sign Beijing's policy stimulus might gain some traction now a trade truce is in place.
That nudged up the Aussie a fraction to $0.6900, but still left it unchanged on the week so far having failed to clear resistance around $0.6935. It was also a lot closer to this month's low of $0.6849 than December's peak at $0.7032.
It fared better on the safe-haven yen having risen around 1.2% over the past two weeks to reach 76.03 yen, a long way from a recent trough of 73.72. The Aussie now faces huge chart resistance around 76.50.
The kiwi dollar firmed a touch to $0.6644 but again was little moved for the week. Support comes in at $0.6586, with resistance at $0.6665.
Data out from New Zealand this week showing resurgent home prices and an upbeat survey on inflation have provided some support by further diminishing expectations of rate cuts.
Three-year bond futures hold firm at 99.235, up from a low of 99.055 late in December. The 10-year contract was steady at 98.8000, implying an yield of 1.2%. Markets have all but given up on an easing at the Reserve Bank of New Zealand's next policy meeting on Feb. 12 and imply around a 40% chance of a move by June.
In contrast, futures are pricing in a 46% chance the Reserve Bank of Australia (RBA) will cut at its meeting on Feb. 4, with the probability rising to almost 100% by June.
Widespread bushfires and their depressing effect on already weak consumer sentiment has added to the case for further stimulus, following three rate cuts last year.
"With consumption slowing post the RBA's December meeting, and the ongoing catastrophic bushfires likely to drag further, the RBA will likely downgrade their optimistic growth outlook," said UBS economist George Tharenou.
"Hence, given the RBA's commitment to "reassess the economic outlook in February", we continue to expect they're likely to cut the cash rate by 25 basis points to 0.50% in February."