Australia, NZ dollars hold gains on improving risk appetites

[SYDNEY] The Australian and New Zealand dollars held gains on Thursday after a bounce in oil prices and a cautious US Federal Reserve set a positive tone for risk assets.

The Australian dollar, which bounced 0.7 per cent on Wednesday, nudged up to US$0.7609, closer to a recent nine-month peak of US$0.7723. Resistance was found at US$0.7635 and support at US$0.7575.

Aiding investor sentiment were minutes of the Fed's last meeting, which showed many members reluctant to hike further in the face of global uncertainty.

However, the Aussie is still down a cent for the week, in part after the Reserve Bank of Australia (RBA) said a further rise in the currency would not be helpful to the economy.

The RBA held rates at a record low of 2 per cent at a monthly policy meeting on Tuesday.

The Antipodean currencies also came under pressure against a vigorous yen, which was hovering near one-month highs.

The New Zealand dollar was little changed at US$0.6818, but up from US$0.6773 the previous day.

The kiwi's slight strengthening is "more a reflection of the generalised USD weakness," BNZ analyst Jason Wong said in a research note.

A resurgent New Zealand dollar is making life harder for the nation's central bank, putting pressure on the vital dairy exports and raising the chance of another interest rate cut as early as this month.

New Zealand government bonds gained, sending yields one basis points lower at the short end of the curve and 1.5 basis points lower at the long end.

Australian government bond futures pulled back from one-month highs, with the three-year bond contract off three ticks at 98.140.

The 10-year contract eased four ticks to 97.5300, while the 20-year contract fell 4.5 ticks to 96.9350.

REUTERS