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Australian, New Zealand dollars pause after scaling 1-month highs

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The Australian dollar stood at US$0.7361 after popping up to US$0.7385, its highest since Dec. 14.

[SYDNEY] The Australian dollar paused after advancing for two straight days to stand near one-month highs on Wednesday, aided by a rally in iron ore and coal prices and broad declines in the US dollar after its strong gains over the last few months.

The Australian dollar stood at US$0.7361 after popping up to US$0.7385, its highest since Dec. 14. It is up 2.1 per cent in January so far, having earlier notched three consecutive months of declines.

The Aussie was helped by gains in iron ore and coking coal - the country's top export earners. Iron ore jumped 8 percent to its strongest in more than three weeks on Tuesday, with coking coal climbing nearly 8 percent.

The US dollar was on the back foot against a basket of currencies as investors braced for Donald Trump's news conference later in the day - his first since winning the presidential election in November.

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Since his upset victory, Wall Street has scaled record highs with US debt yields soaring to levels unseen since 2015, and the dollar index hitting a 14-year peak on expectations that Mr Trump's policies would stoke inflation.

Against that backdrop, financial markets are keen to see how Mr Trump will follow through on campaign pledges.

Elsewhere, the Aussie stood near three-week highs against the euro and at a two-month peak on the pound . It rose 0.6 per cent against its antipodean neighbour to be near its highest in six weeks.

The New Zealand dollar held at US$0.6985, after touching a four-week high of US$0.7048 on Tuesday. The Kiwi has gained 0.7 per cent so far this month.

Data out on Wednesday showed job advertisements rose 18.8 per cent in December from a year-ago, the strongest annual growth since late 2011. Job ads have now risen for 16 months in a row, underscoring a buoyant economy with strong demand for labour.

Still, analysts expect gains in both the Aussie and the Kiwi to be subdued on expectations the greenback would continue to rally over the long run.

New Zealand government bonds gained, sending yields 2 basis points lower at the long end of the curve.

Australian government bond futures eased, with the three-year bond contract down 1 tick at 97.99. The 10-year contract slipped 1.5 ticks to 97.2350.