The Australian dollar rebounded from three-month lows and bond prices fell on Tuesday following encouraging economic data, dragging the New Zealand dollar higher. Yet, both currencies were on track with hefty monthly losses. The Australian dollar bounced around half a US cent to $0.7239, pulling away from $0.7145 touched last week.
The Aussie jumped 0.8 percent against the yen, while the euro slumped one full cent to A$1.5400. The move up came after first quarter balance of payments data showed net exports could add a larger than expected 1.1 percentage points to gross domestic product (GDP), which will be released on Wednesday. Analysts, polled last week, forecast the economy grew by 0.6 percent in the March quarter. The Aussie, however, was still expected to post a 5 percent drop this month, the biggest in nearly a year. Australian government bond futures retreated, with the three-year bond contract off 4 ticks at 98.350. The 10-year contract shed 2.5 ticks to 97.7000, while the 20-year contract was 1.5 tick lower at 97.1050.
Aussie strength helped the New Zealand dollar firm to $0.6726, having survived a test of a support level at $0.6700 earlier. A private survey by ANZ showed that New Zealand consumer confidence had risen moderately, which could provide optimism to investors, though there was no initial boost to the Kiwi in the wake of the survey release. New Zealand government bonds gained, sending yields 1.5 basis points lower at the short end of the curve and 0.5 basis points lower at the long end of the curve.