Aussie pauses, kiwi falls

24 Sep, 2016

The Australian dollar paused on Friday after a four-day rally but is set for its best weekly performance in two months. The Australian dollar held at $0.7636, coming off an over two-week high hit on Thursday when it rose 0.3 percent. The Aussie got a boost after the Reserve Bank of Australia (RBA) governor gave an upbeat assessment of the economy on Thursday while adding it was "not particularly useful" to continue cutting rates, after already easing twice this year.
The Aussie was also aided this week by the Bank of Japan's recommitment to help lift its economy out of decades-long stagnation and the Fed staying pat on interest rates. The Aussie also outpaced the New Zealand dollar on Friday, rising for the seventh straight day to hit a one-month high of NZ$1.0486. The cross is, however, down about 1.5 percent this year.
The New Zealand dollar fell 0.3 percent to $0.7291, continuing to drift lower after the central bank left rates on hold at 2.0 percent on Thursday but signalled further easing. It is set to end the week flat but is up 6.6 percent so far this year. New Zealand government bonds gained, sending yields 1 basis point lower at the short end and half a basis point lower at the long end. Australian government bond futures were mixed, with the three-year bond contract down 1 tick at 98.43. The 10-year contract rose 3 ticks to 97.9850. "The Aussie has done a lot better in 2016 than many expected," wrote Greg McKenna, chief market strategist at AxiTrader.

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