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Australia, NZ dollars at multi-week highs as US$ sags
[SYDNEY] The Australian dollar held near two-month highs on Wednesday as traders unwound their long positions in the greenback after US president-elect Donald Trump expressed concerns at the currency's strength.
The Australian dollar stood at US$0.7542, a level not seen since Nov 14. It shot past a key resistance of US$0.7525 in the previous session when it posted its biggest daily percentage gain since early September.
The New Zealand dollar hovered near one-month highs at US$0.7203, after posting its largest daily per centage gain in four months.
The Aussie is now up nearly 5 per cent so far in January, making it one of the best performing major currencies this year.
That is a marked turnaround from late December when it hit a seven-month trough of US$0.7160 as the US dollar rode high on wagers that Mr Trump's policies would stoke US inflation.
That reflation trade seems to have faltered as Mr Trump has failed to offer any details on his policies or on measures to revive economic growth. Instead, he told the Wall Street Journal that US companies "can't compete with (China) now because our currency is strong and it's killing us".
Locally, investors will keep a close eye on jobs data for December due on Thursday to take the pulse of the Australian economy, which contracted in the third quarter of last year. While unemployment has been steady at three-year lows, jobs have been heavily skewed toward part-time work.
Meanwhile, a measure of Australia's consumer sentiment barely budged in January, data out on Wednesday showed.
Elsewhere, the Aussie held at one-week lows on the pound, after skidding 1.5 per cent in the previous session following a speech by British Prime Minister Theresa May on plans to leave the European Union.
Investors latched on to her stated commitment to put a settlement agreement back to parliament, which could help soften the deal eventually.
That sent sterling soaring to its biggest one-day gain since at least 1998 against the US dollar.
The New Zealand dollar too fell 1.3 per cent against the British pound. However, it outperformed versus other currencies, fuelled by an auction in which global dairy prices inched up following losses in two previous auctions.
New Zealand government bonds gained, sending yields 3.5 basis points lower at the long end of the curve.
Australian government bond futures were mixed, with the three-year bond contract unchanged at 98.00. The 10-year contract rose 2.5 ticks to 97.295.