The Australian dollar rocketed past a key barrier at 80 US cents, triggering a wave of stop losses on Friday while its New Zealand cousin soared to a two-week high as fading expectations of a US rate hike sank the greenback. The dollar index slipped 0.6 percent to its lowest since January 2015 after New York Fed President William Dudley sounded less confident about US rate rises in the face of weak inflation.
The Australian dollar climbed the most in 3-1/2 weeks to hit $0.8110, the highest since May 2015. It is up 1.77 percent for the week, on track to record its best performance since mid-July. The New Zealand dollar jumped 1.4 percent to $0.7331, the highest since August 22. For the week, the kiwi has risen 3.8 percent after five straight weeks of losses.
The US currency was already under pressure on worries about the impact of hurricanes Irma and Harvey on the world's largest economy, stoking safe-haven demand for government debt and the yen. New Zealand government bonds gained, sending yields 5.5 basis points lower at the long end of the curve.
Australian government bond futures rose, with the three-year bond contract up 3 ticks at 98.020. The 10-year contract climbed 8.5 ticks to 97.45. "Just seems to be mix of several things - dollar weakness for one. We've also just got news of an earthquake in Mexico. That's also having a play as traders prefer yen for safe haven," said Stuart McDonald, a Melbourne-based forex dealer at IG Markets.
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