Australian, New Zealand dollars firm as Sino-US talks extended

[SYDNEY] The Australian dollar rose to a three-week high on Wednesday as speculation swirled that Beijing and Washington might be making progress in resolving their trade dispute, lifting Asian share markets and risk sentiment.

The talk helped offset disappointing domestic data on home building which suggested the sector would be a drag on the economy in 2019 after several years of strength.

The Aussie dollar still edged up 0.3 per cent to US$0.7162, snapping resistance at US$0.7150 and on track for the next chart barrier at US$0.7200.

The New Zealand dollar firmed 0.4 per cent to US$0.6752, taking it back toward Monday's top of US$0.6766.

The United States and China extended their latest trade talks into Wednesday amid signs of progress on issues including purchases of US farm and energy commodities and increased access to China's markets.

There were also report President Donald Trump was keen to get a deal done soon in the hope it would help Wall Street recoup some of the steep losses suffered in recent months.

The optimism outweighed data showing approvals to build new homes in Australia dived a surprisingly sharp 9.1 per cent in November to hit the lowest since mid-2013.

"It's a sign that builders, unsurprisingly, are less keen to add to the residential pipeline in an environment of falling prices in Sydney and Melbourne," said NAB economist Kaixin Owyong.

"These data are consistent with business conditions in the construction sector declining from late 2017 peaks."

A more positive note was struck by figures on job vacancies which showed an increase of 1.3 per cent to a record high in the three months to November.

Over in New Zealand, a survey from ANZ showed job advertisements fell 3.5 per cent in December, from the previous month, pointing to some cooling in what has been a very strong labour market.

For bonds, the improvement in risk sentiment nudged prices lower with Australian three-year bond futures off 1.5 ticks at 98.150. The 10-year contract eased 3.5 ticks to 97.6600.

New Zealand government bonds were little changed, with 10-year yields holding at 2.42 per cent.

REUTERS