The Australian and New Zealand dollars came off recent highs on Friday as risk trades were hit amid bets Europe's massive bond purchasing was nearing an end and on jitters over souring trade relations ahead of a major meeting of global leaders. The Australian dollar was last down 0.2 percent at $0.7608 from a six-week high of $0.7677 touched on Wednesday. Despite Friday's losses, the Aussie is set to notch up its third straight week of gains.
The New Zealand dollar held at $0.7022, down from Wednesday's $0.7060 - a level not seen since end-April. The kiwi is set for a small weekly gain, adding on to a 1 percent rise last week. Analysts expect the antipodean currencies to tread water this year and edge up only a tiny bit over 12 months, a Reuters poll showed on Thursday.
As demand for safe haven assets grew, New Zealand government bonds gained, sending yields 2.5 basis points lower towards the long end of the curve. Australian government bond futures also rose, with the three-year bond contract up 2.5 ticks at 97.760. The 10-year contract gained 3.5 ticks to 97.1950.
"It feels like a risk-off day today as we head toward a fractious G7, the North Korean summit, and a long weekend in most of Australia," said Greg McKenna, chief strategist at AxiTrader. The so-called Group of Seven summit takes place on Friday and Saturday in Charlevoix, Quebec where trade is going to dominate discussions after US President Donald Trump slapped import tariffs on steel and aluminium imports last week.
Investors also looked to a historic US-Korea summit in Singapore on June 12 where the main issue is whether North Korea will abandon its nuclear weapons programme.