Australian dollar climbs to 6-week top on strong data, NZ dollar rangebound

[SYDNEY] The Australian dollar sprung to a six-week top on Monday after surprisingly robust first-quarter data pointed to stronger than expected economic growth.

Closely-watched retail sales also bounced in April.

The Australian dollar climbed to US$0.7615, a level not seen since April 24. The Aussie faces stiff chart resistance around US$0.7600. If it is able to sustain the move above current levels the next stop is seen at US$0.7655.

The New Zealand dollar held within recent ranges at US$0.7005 but trade was thin because of a public holiday there.

Monday's figures from the Australian Bureau of Statistics (ABS) showed companies' gross operating profits climbed 5.9 per cent to a record in the March quarter, handily beating expectations for a 3.0 per cent increase.

Business inventories were up 0.7 per cent in the quarter versus expectations for a 0.1 per cent rise.

Separate data out on Monday showed retail sales bounced 0.4 per cent in April, beating expectations for a 0.2 per cent increase and a flat result in the previous month.

All eyes will be on first-quarter gross domestic product data due Wednesday which is seen likely to show the economy expanded 0.8 per cent, taking annual growth to 2.7 per cent.

The Reserve Bank of Australia board meets on Tuesday when it is seen as all but certain to hold its policy rate at a record low 1.50 per cent.

The futures market is not fully priced for a hike until September next year.

"With profits at record highs, businesses are investing and hiring more staff. And those people that are finding jobs are adding to spending and therefore keeping the virtuous cycle going," said Craig James, Sydney-based chief economist at CommSec.

"Clearly the Reserve Bank has done well by leaving rates low to stimulate the economy. And still there are few signs that inflationary pressures are emerging. The next rate move is up, but not for a number of months yet."

Australian government bond futures slipped, with the three-year bond contract off 4.5 ticks at 97.80. The 10-year contract eased 2 ticks to 97.275.

REUTERS