The Australian and New Zealand dollars hovered near multi-week peaks on Thursday as a rally in metals combined with low volatility globally and a soft greenback encouraged leveraged plays in higher-yielding assets. Australia's commodity-driven currency edged up 0.1 percent to $0.7778, within kissing distance from Wednesday's high of $0.7779 - a level not visited since October 24.
The Aussie is seen ending the year about 8 percent higher, reversing the losing streak of the past four years. Trade was light across the board as many market participants were on holiday.
The New Zealand dollar also joined the party, climbing as far as $0.7077 - a level not seen since mid-October. The kiwi dollar is up 2 percent for the year, almost matching its lacklustre performance in 2016.
The yield premium demanded to hold Aussie 10-year debt over US Treasuries has widened to 27 basis points from as low as 8 basis points in late November. New Zealand government bonds rose in line with US Treasuries, sending yields about 4 basis points lower at the long-end and 2-3 basis points lower at the short-end of the curve.
Australian government bond futures edged higher too, with the three-year bond contract up half a tick at 97.805. The 10-year contract rose 2.5 ticks to 97.3050. Thursday's gains came as copper, seen as a barometer for global growth, held near a four-year high. Gold prices hovered close to a one-month top while oil was not far from this week's 2-1/2 year peak.
Australia is a major exporter of natural gas, metals and iron ore, so higher prices for these commodities add to the country's national income.