The Australian dollar bounced on Thursday after surprisingly strong housing data showed record-low interest rates were helping the economy gain traction, lessening the need for further easing. The New Zealand dollar also got a lift after the Reserve Bank of New Zealand disappointed doves by reiterating that higher rates would likely be needed next year.
The Aussie hopped up half a US cent to $0.9504 as government data showed approvals to build new homes surged 14.4 percent in September, far above forecasts.
The New Zealand dollar bounced off lows after the RBNZ reiterated its outlook for interest rate rises next year while protests against the strength of the currency were not as aggressive as some had expected.
The kiwi rose to $0.8257, from a six-week trough of $0.8193. It was still on track to show a loss of 0.5 percent for the month, having skidded 2-1/2 cents in little over a week.
Australian government bond futures were hard hit with the three-year bond contract down 9 ticks at 96.950 and off a one-month peak. The 10-year contract lost 6.5 ticks to 96.005, leading to a bearish flattening of the yield curve.
The Aussie had climbed 5 cents since late August to reach a five-month peak last week. Immediate support is seen at $0.9441, with resistance at $0.9520, the 50 percent retracement of the $0.9280-$0.9758 move.
The kiwi's bounce came after RBNZ Governor Graeme Wheeler said that rates would rise in 2014 as economic growth picks up.