The Australian dollar started the week on a firm footing, helped by improved risk sentiment across Asian markets on hopes the United States and China will soon resolve their trade war, while the New Zealand currency was boosted by solid economic data. Supporting broader sentiment in the region on Monday were comments by US President Donald Trump that he would delay a planned tariff increase on Chinese imports and that he was looking forward to a meeting with Xi Jinping once a deal is hammered out.
The Australian dollar, a liquid proxy for Chinese growth, added 0.3 percent to $0.7146, drifting away from a 10-day trough of $0.7070 hit last week on reports a Chinese port has banned Australian coal imports. The scare abated as several officials from China and Australia separately came out to deny the report, saying there were delays as Chinese customs authorities had stepped up safety checks on foreign cargoes.
The New Zealand dollar added 0.4 percent to $0.6865 as data showed the country's retail sales jumped last quarter, tempering concerns about softer economic growth.
The solid data led a sell-off in government bonds , sending yields about 2-4 basis points on the short-end and 5 basis points higher on the long end of the curve.
Australian government bond futures were mixed, with the three-year bond contract easing 1 tick to 98.35. The 10-year contract added 2.5 ticks to 97.93.
Also helping the Aussie, prices of Australia's biggest export earners - iron ore and coal - rose, while copper, a barometer of global growth, jumped to a seven-month top.
The gains came as market focus shifted squarely to US-Sino trade talks with Trump tweeting progress had been made on intellectual property, technology transfers, agriculture, services and currencies.
"Even as we wait for details of the agreement, the anxiety is likely to ease and encourage bullish risk exposure in general," Citi analysts said in a note.
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