Australian dollar near 1 week highs, kiwi steady on budget forecasts

[SYDNEY] The Australian dollar held near a one-week high as riskier assets were boosted by signs of progress in Sino-US trade relations, while New Zealand's currency was steady as the government unveiled a healthy budget.

But most of the action in the forex world was in the pound with most other currencies bystanders amid high political drama in Britain where Prime Minister Theresa May survived a no-confidence vote on her leadership.

The Aussie was last at US$0.7217 against the US dollar after going as high as US$0.7238 on Wednesday.

Sentiment was boosted by news China bought over 1.5 million tonnes of US soybeans, in the first major US soybean purchases in more than six months. US President Donald Trump has said that trade talks with China were progressing.

Also helping risk appetite, China appears to be easing its high-tech industrial development push, dubbed "Made in China 2025," which has long irked the United States.

"Positive headlines have been rolling out of the China-US negotiations, suggesting it may squeeze higher in the short term," ANZ analysts said in a note to clients.

"But the bias is to sell rallies."

The Australian dollar is seen as a gauge of risk sentiment because the country's economy is heavily dependent on world trade and China.

In New Zealand dollar, the kiwi waddled at US$0.6885 to stay near a two-week trough of US$0.6825 set on Wednesday.

Earlier, New Zealand released its half-year economic and fiscal update.

"The forecasts continue to show the economy growing at or near its historical average," said Nick Tuffley, chief economist at ASB.

"The net debt track also shows a steady decline over the forecast period," he added.

"The government has kept its fiscal powder dry. The fiscal accounts have room for modest increases in spending."

New Zealand government bonds were barely changed.

Australian government bond futures eased a tad, with the three-year bond contract off two ticks at 98.015. The 10-year contract slipped 1-3/4 ticks to 97.5300.

REUTERS