The Australian dollar staged a broad rally on Wednesday, while debt futures fell further after the economy grew at a much faster rate than expected, prompting markets to mark down the risk of a further cut in interest rates.
The Aussie gained about half a US cent to reach a high of $0.7236 on data showing the economy unexpectedly sped up to an annual pace of 3.0 percent in the December quarter. Market consensus was for a steady growth rate of 2.5 percent.
It was last at $0.7232, up 0.8 percent on the day. The Aussie reached a one-month high of 82.57 yen, while the euro slid towards A$1.5000 - a low not seen since early January. Versus its New Zealand peer, the Aussie scaled a one-month peak of NZ$1.0901.
"Today's GDP results confirm the resilience of the Australian economy, thanks to a rebalancing of activity away from mining investment into the services sectors," said Jasmin Argyrou, senior investment manager at Aberdeen Asset Management.
Interbank rate futures fell with the June contract sliding by the most to 98.150. The implied yield rose to 1.85 percent, suggesting the market is giving a 60 percent chance of a quarter point cut by mid-year, down from nearly 100 percent a few weeks ago.
Bond futures, already under pressure from a negative US lead, fell further. The three-year contract lost 12 ticks to 98.190 and the 10-year contract shed 11 ticks to 97.535.
Encouraging US data had sparked a selloff in US Treasuries overnight. The kiwi had a less eventful session. It was little changed on the greenback at $0.6636, having eased back from a session high of $0.6663.
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