The Australian dollar got a small lift on Thursday after China's August imports unexpectedly rose for the first time in 22 months in a sign that demand in the world's second-largest economy was picking up. The Australian dollar rose as high as $0.7687, not too far from a three-week top of $0.7698 touched on Wednesday, after the positive news from Australia's No 1 trading partner.
The Aussie has been flirting with 77 cents, a key resistance level on the charts, but has failed to trade above it. The New Zealand dollar was trading up 0.12 percent at 0.7456. It has risen 16 percent since mid-January as the "economy accelerated, interest rates look fabulous for investors in a relative comparison, and our commodity prices are recovering," said ANZ Senior Economist Sharon Zollner.
New Zealand government bonds were mixed, with yields 1 basis point lower at the short end and 1.5 basis points higher at the long end. BNZ FX Strategist Kymberly Martin said a recent run of upbeat data had led her to revise up forecasts for second-quarter economic growth, data for which is due next week.
Australian government bond futures eased, with the three-year bond contract down 2 ticks at 98.57. The 10-year contract was off 2.5 ticks at 98.135. "Recently, every time the Aussie has moved above that level it has been hammered back down," said Sydney-based Greg McKenna, chief market strategist at AxiTrader. The Aussie briefly traded around that level in mid-August when it hit a more than three-month high of $0.7760 but then lost 2.4 percent within two weeks. "Last night's high of $0.7698 again reinforced that traders are wary of the supply zone around 77 cents where sellers have been consistently lurking," McKenna added.