The New Zealand and Australian dollars held near this year's highest levels on Friday following upbeat data and improving risk sentiment, putting them on track for hefty weekly gains. The New Zealand dollar powered up 0.6 percent and touched an eight-week peak of $0.6775. It looked set to test the December high of $0.6881. It has bounced 3 cents this month, and if sustained, it would be the largest increase since October.
It received a fillip after New Zealand posted a surprise monthly trade surplus. The kiwi muscled up across the board, sending the already soggy pound to fresh 10-month lows at NZ$2.0617. Sterling has skidded nearly 5 percent so far this week on mounting fears Britain might leave the European Union. Against the Aussie, the pound also dropped to its lowest since May at A$1.9249 and is down around 10 cents so far this year.
Kiwi strength dragged the Australian dollar higher to $0.7248, near an eight-week peak of $0.7257. Commodity currencies had got a boost overnight after a rebound in oil prices spurred a risk rally. The Aussie was on track for a weekly increase of 1.3 percent, its third week of gains, having bounced from a seven-year trough of $0.6827. A break of key resistance around $0.7250 would target $0.7328, then $0.7386. New Zealand government bonds gained, sending yields 2 basis points lower along most of the curve. Australian government bond futures were a touch firmer, with the three-year bond contract up 1 tick to 98.270. The 10-year contract edged up 1 tick to 97.6100, while the 20-year contract was steady at 97.0750.
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