The Australian and New Zealand dollars held gains on Thursday after a bounce in oil prices and a cautious US Federal Reserve set a positive tone for risk assets. The Australian dollar, which bounced 0.7 percent on Wednesday, nudged up to $0.7609, closer to a recent nine-month peak of $0.7723. Resistance was found at $0.7635 and support at $0.7575. Aiding investor sentiment were minutes of the Fed's last meeting, which showed many members reluctant to hike further in the face of global uncertainty.
The Antipodean currencies also came under pressure against a vigorous yen, which was hovering near one-month highs. The New Zealand dollar was little changed at $0.6818, but up from $0.6773 the previous day. The kiwi's slight strengthening is "more a reflection of the generalised USD weakness," BNZ analyst Jason Wong said in a research note. A resurgent New Zealand dollar is making life harder for the nation's central bank, putting pressure on the vital dairy exports and raising the chance of another interest rate cut as early as this month.
New Zealand government bonds gained, sending yields 1 basis points lower at the short end of the curve and 1.5 basis points lower at the long end. Australian government bond futures pulled back from one-month highs, with the three-year bond contract off 3 ticks at 98.140. The 10-year contract eased 4 ticks to 97.5300, while the 20-year contract fell 4.5 ticks to 96.9350.
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