The Australian and New Zealand dollars stayed near two-month lows on Friday, on track for their second straight weekly loss on broad greenback strength. Bonds were also under pressure as expectations of a US rate hike next week battered Treasuries. Yields on Australian 10-year paper jumped to their highest since late 2015 at 2.98 percent, up 24 basis points in just two weeks.
The Australian dollar held at $0.7519, up 0.24 percent, after touching a trough of $0.7491 overnight. It was on track to fall 1 percent for the week. After gaining in the first two months of 2017, the Aussie has fallen 1.8 percent in March, largely due to a resurgent US dollar.
The New Zealand dollar, which fell the past seven sessions, edged 0.25 percent higher to $0.6909. It was set to post a 2 percent loss for the week. The kiwi has had a particularly trying March, down about 4 percent. In comparison, the US dollar has climbed 0.8 percent against a basket of global currencies as markets priced in a US Federal Reserve rate hike at its March 14-15 meeting.
New Zealand government bonds eased, sending yields four basis points higher. Australian government bond futures slipped too, with the three-year bond contract down 3 ticks at 97.815. The 10-year contract was off 4.25 ticks at 96.9975. "Since the local close yesterday, the NZD has been trading in a tight range around the $0.69 mark... the fact that the currency has spent the last 12 hours without falling feels like a 'win'," Bank of New Zealand currency strategist Jason Wong said in a research note.