The Australian dollar held firm on Wednesday after hitting a three-month top, while its New Zealand cousin reached the highest in over a year as a rally in global risk appetite lifted commodities and dented the Japanese yen. The Australian dollar was consolidating at $0.7590, having jumped 1.2 percent overnight to as far as $0.7650. The bounce recovered all the losses suffered in the wake of Britain's vote to leave the European Union.
The gains were led by a pullback in the safe-haven yen, which saw the Aussie climb 3 percent on Tuesday to top out 80.34 yen. It was last at 79.25 and up from 76 at the start of the week. The Aussie was supported by gains in commodities, including a 6 percent jump in iron ore prices, as investors wagered that more policy stimulus was coming around the world.
Likewise, the New Zealand dollar got as far as $0.7325 overnight, its highest since May 2015. It was last at $0.7250 having been weighed down somewhat by comments from a top official at the Reserve Bank of New Zealand. Assistant governor John McDermott said the bank was paying more attention to a persistent period of low inflation, suggesting there was still a risk it might cut rates again.
With risk assets back in vogue for the moment, New Zealand government bonds eased in price, sending yields as much as 4 basis points higher at the long end of the curve. The three-year Australian government bond future dipped 2 ticks to 98.470, while the 10-year contract fell 4 ticks to 98.0050.
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