The Australian and New Zealand dollars found support on Thursday as the global appetite for risk assets recovered from the shock of Brexit, though speculation about future cuts in domestic interest rates limited their gains. The Australian dollar was parked at $0.7448, having risen almost half a US cent in the previous 24 hours, but faced stiff chart resistance in the $0.7450/7470 zone.
It has now recovered around half the loss suffered when Britain voted to leave the European Union, which toppled it from $0.7650 to $0.7305 in just a day. The currency was still 3 percent higher for June as a whole, thanks in large part to the fading risk of a rise in US interest rates which hobbled the US dollar. Bond futures were off just a shade on Thursday, with the three-year bond contract down 2 ticks at 98.490. The 10-year contract eased a single tick to 97.990.
The New Zealand dollar was holding at $0.7101, having bounced from as low as $0.7042 on Wednesday. It was up almost 5 percent for the month so far, aided in part by a run of upbeat domestic economic data. New Zealand government bonds eased, sending yields 1.5 basis points higher at the short end of the curve. Bond prices remain sharply higher for the month with yields on 10-year paper just above all-time lows at 2.38 percent. That was down from 2.63 percent at the end of May and 3.60 percent at the start of the year. While the Federal Reserve had been talking of a move as early as July, recent events have led the market to price out all chance of hike this year and perhaps not until 2018.