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Australia, NZ dollars upbeat on Sino-US trade hopes

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The Australian and New Zealand dollars rose along with global equities on Wednesday as tentative signs of easing Sino-US trade tensions whetted risk appetite.

[SYDNEY] The Australian and New Zealand dollars rose along with global equities on Wednesday as tentative signs of easing Sino-US trade tensions whetted risk appetite.

The Australian dollar climbed 0.2 per cent to US$0.7219, rising above a one-month trough of US$0.7170 touched earlier in the week.

A gauge of Asia-Pacific shares outside Japan jumped 0.9 per cent while US stock futures were upbeat too.

The New Zealand dollar was up 0.2 per cent at US$0.6887, inching towards a recent six-month top of US$0.6969.

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Risk appetite got a boost on Wednesday after US President Donald Trump said trade talks with Beijing were already underway, with more meetings likely among US and Chinese officials.

Mr Trump also told Reuters that the Chinese government was buying a "tremendous amount" of US soybeans after a Dec 1 truce in the Sino-US trade war.

"Trade concerns are still creating the greatest downside in markets and because of this there is two-way risk," said Kerry Craig, Global Market Strategist, JP Morgan Asset Management.

"Any improvement in the US-China relationship will be warmly welcomed by markets and the announcement on auto tariffs does illustrate that there is an upside," Mr Craig said.

"However, we wouldn't be surprised to see things get worse before they get better."

Also helping sentiment was news that Huawei Technologies' chief financial officer, Meng Wanzhou, was granted bail by a Canadian court on Tuesday, 10 days after her arrest in Vancouver at the request of US authorities.

The Aussie has had tough year as the Sino-US trade tensions and worries about global growth chilled investor sentiment. The currency has either fallen or remained flat in every single month but two so far in 2018.

The kiwi is down about 3 per cent this year after paring most of its earlier losses in November led by better-than-expected economic data.

New Zealand government bonds fell, sending yields about two to three basis points higher across the curve.

Australian government bond futures were mixed, with the three-year bond contract flat at 98.035. The 10-year contract added one tick to 97.55.

REUTERS