Australia, NZ dollars near 7-month lows

[SYDNEY] The Australian and New Zealand dollars edged higher on Thursday in thin holiday trading but stayed near multi-month lows on sustained demand for the greenback.

The Australian dollar was up 0.24 per cent at US$0.7191, bouncing off a seven-month trough of US$0.7160 hit last week. The Aussie has fallen in seven out of the last 10 sessions.

The New Zealand dollar ticked 0.14 per cent higher to US$0.6925, after rising 0.4 per cent the previous day.

Both the Aussie and the Kiwi have been particularly hard hit since early November after Donald Trump won the US Presidential elections, sending Treasury yields and the US dollar soaring on expectations of stronger US growth and inflation.

The Aussie is set to end the year down 1.3 per cent, its fourth straight year of losses.

In comparison, the kiwi is seen ending with an annual gain of 1.4 per cent, having found support from a string of upbeat economic data at home.

Figures last week showed New Zealand's third-quarter gross domestic product rose 3.5 per cent year on year, putting it among the rich world's fastest-growing nations.

Also helping the kiwi was a recovery in prices of dairy, New Zealand's top export earner.

New Zealand government bonds jumped in line with US Treasuries following strong demand for its five-year debt.

The US Treasury Department auctioned US$34 billion of five-year notes, which fetched a high yield of 2.057 per cent, the highest since April 2011. The auction also yielded the highest bid-to-cover ratio since Nov 2014 and record high buying from indirect bidders.

Australian government bond futures rose too, with the three-year bond contract up six ticks at 97.930. The 10-year contract climbed seven ticks to 97.1750.

REUTERS