SYDNEY: The Australian and New Zealand dollars were higher against the greenback on Monday, buoyed by better than expected Chinese retail sales and industrial output data and weakness in their U.S. counterpart.
The Aussie was up 0.19% at $0.7344, the highest since Nov. 10, taking back some of the lost ground last week but still far from its recent peak of $0.7555 of Oct. 28.
The kiwi dollar was similarly up 0.13% at $0.7050 after shedding 1.5% last week. The currency faces immediate resistance at the $0.7176 level and support around $0.6996.
The risk-sensitive currencies had been hit by concerns about slowdown in China, their biggest export market, and by strength in the U.S. dollar, which had benefited from bets of earlier than expected rate hikes by the Federal Reserve.
China's industrial output and retail sales in October handily beat forecast, growing 3.5% and 4.9% respectively from the same period a year ago.
The dollar index was down 0.12% at 95.015 after falling as low as 94.991 in response to a dip in consumer sentiment due to high inflation worries.
While Fed officials have sounded increasingly worried that inflation might prove long lasting, the Reserve Bank of Australia (RBA) is sticking to its dovish outlook for rates.
Australia dollar gains, bonds buckle as market guns for rate hikes
On that basis strategists don't expect the Aussie dollar will be able to build on its gains this week when the RBA is due to deliver a speech titled "Recent Trends in Inflation" on Tuesday, which will be followed by key quarterly wages data Wednesday.
"We still see room for RBA rate hike expectations to adjust lower which is a headwind to AUD ...(and) Q3 2021 wage price index could cause some AUD volatility on Wednesday," Commonwealth Bank of Australia strategists told clients in a note.
"The Governor is likely to remind listeners that wages growth is still much softer in Australia compared to some other advanced economies."
Bond prices were higher on Monday, pushing the 10-year bond benchmark three basis points lower to 1.77%, and three-year bond yields five basis points lower to 0.98%.
New Zealand yields were between one and two basis points lower across the curve.
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