SYDNEY: The Australian dollar enjoyed a relief bid on Wednesday after data showed the economy had dodged a technical recession by growing last quarter, while a jump in new coronavirus cases in Auckland stalled the kiwi’s recent rally.

The Aussie firmed 0.2% to $0.7330, after rising 0.3% overnight and topping out at $0.7340 resistance. Support lies around $0.7285 and $0.7220.

The New Zealand dollar held at $0.7040, having climbed 0.7% overnight to reach a three-week top at $0.7069. Support lies at $0.6990/0.7000.

Aussie bulls were relieved when data showed the Australian economy grew by 0.7% in the June quarter, beating forecasts of a 0.5% increase.

Crucially, it avoided a contraction that would have signalled a recession given the economy is set to shrink sharply this quarter due to widespread coronavirus lockdowns.

There had been speculation a negative number might force the Reserve Bank of Australia (RBA) to delay its bond tapering plans at a policy meeting next week.

Investors seemed to agree as yields on 10-year bonds climbed 8 basis points (bps) to their highest in five weeks at 1.25%. That left them 8 bps below Treasuries, compared to 14 bps on Tuesday.