The Australian and New Zealand dollars were poised to snap their three-week winning streaks on Friday as the rapid pace of recent gains and the proximity of major chart resistance encouraged a bout of profit-taking. The Aussie dollar eased back to $0.7951 having again met offers above the 80-cent barrier, down 0.2 percent for the week. It touched a two-year top of $0.8066 last week after climbing over 7 percent in just two months.
The kiwi dollar likewise edged back to $0.7428, after repeatedly running into resistance above 75 cents. It was down 1.1 percent for the week, on course for its first weekly fall after three weeks of gains, having hit its highest in over two years last week at $0.7557. In New Zealand, the kiwi was undermined by a sharp drop in local bond yields which were down over 7 basis points at the long end of the curve.
The move tracked a fall in yields globally after the Bank of England struck a cautious tone at its policy meeting, offering an economic outlook tainted by the impact of Brexit. Australian government bond futures were restrained by the stronger domestic data, and the three-year bond contract stayed flat at 98.060. The 10-year contract edged up 3 ticks to 97.3650.
The Aussie drew some support from another upbeat economic outlook from the Reserve Bank of Australia (RBA), which forecasts growth picking up to around 3 percent for the next two years. The central bank did caution that further gains in the currency would threaten the outlook, but felt current levels were not a major drag.