The Australian and New Zealand dollars got a rare lift on Thursday while bond yields hit historic lows after the US Federal Reserve flagged rate cuts ahead and stoked wagers on policy easing worldwide. The Fed's reversal even overshadowed a dovish speech by Reserve Bank of Australia (RBA) Governor Philip Lowe that led markets to sharply narrow the odds on another cut in local rates as soon as July.
With the US dollar under broad pressure, the Aussie edged up to $0.6895 and away from the week's trough of $0.6832. It still faces resistance around $0.6910 and $0.6940.
The kiwi bounced to $0.6570 and left behind the recent low of $0.6488. It faces resistance at $0.6590.
Futures lifted the probability of a July cut to 76%, from less than 50% before Lowe's speech. A move to 1% is more than fully priced by August, and yet a further easing to 0.75% by Christmas.
Yields on three-year government debt dived to a fresh record low of 0.922%, while futures climbed 4.5 ticks to a peak of 99.115. The 10-year contract also added 4.5 ticks to an all-time high of 98.700.
In New Zealand, data on gross domestic product showed the economy grew a solid 0.6% in the March quarter and 2.5% for the year, though the detail on household spending was softer.
Two-year yields hit an all-time low of 1.14%, far below the cash rate, as investors wagered the Reserve Bank of New Zealand (RBNZ) might feel forced to cut rates at its meeting next week given the global shift to stimulus.