The Australian dollar jumped past a crucial chart hurdle on Wednesday to a two-month high after data from top trading partner China defied expectations for a slowdown, while the New Zealand dollar tumbled to a 3-1/2 month trough on lukewarm inflation. The Aussie broke above 72 US cents to as high as $0.7206, a level not seen since Feb. 22 after official figures showed China's economy grew at 6.4 percent in the March quarter when analysts had predicted a slowdown to 6.3 percent.
Across the Tasman Sea, the New Zealand dollar was last at $0.6731 after going as low as $0.6668 following data that showed inflation had slowed by more than expected in the first quarter, undershooting the central bank's forecasts The kiwi also suffered against its Aussie counterpart, with the pair now at the highest since early November.
The lukewarm inflation set fire in New Zealand government bonds with yields down about 6-7 basis points in the short-end of the curve. Australian government bond futures were also weaker, with the three-year bond contract down 2 ticks at 98.550. The 10-year contract eased 3 ticks to 98.03.
Separately, China's industrial output grew at the fastest pace since July 2014 as factories ramped up output in anticipation of more business amid government support measures. Though analysts cautioned it was too early to call a recovery in China, the solid numbers boost expectations the world's second biggest economy is at least starting to stabilise, which bodes well for global trade amid fears of a slowdown this year.
"Pretty solid numbers all round and that is good for the Aussie which has finally broken above 72 (cents)," said Rodrigo Catril, Sydney-based senior forex strategist at the National Australia Bank.
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