The Australian dollar climbed to a six-week high on Wednesday while its New Zealand cousin inched up on expectations that top trading partner China will introduce more policy measures to stave off a sharper slowdown. The Australian dollar, a liquidy proxy for Chinese assets, rose 0.3% to a high of $0.6885, a level not seen since July 31. The Aussie has risen every single day this month but two and is so far up 2% in September on broader expectations global central banks, including the US Federal Reserve, will take steps to save the world from tipping into recession.
The New Zealand dollar went as far as $0.6439 to be within striking distance of a recent 3-1/2-week top of $0.6444. The kiwi is so far up 1.9% in September after two straight monthly losses. New Zealand government bonds fell in line with Treasuries, sending yields about 5 basis points higher on the long-end of the curve.
Australian government bond futures were weaker as well, with the three-year bond contract down 2.5 ticks at 99.135. The 10-year contract slipped 5 ticks to 98.87. Wednesday's gains came after the editor-in-chief of China's Global Times said on Twitter the country would introduce "important measures" to ease the negative impact from its long and bitter trade war with the United States.
The Global Times is a tabloid published by the People's Daily of China's ruling Communist Party.
"Any steps taken to boost China's growth are prima facie positive for A$," Westpac currency strategist Sean Callow said.
"But we suspect AUD/USD will need more substantive news in order to close the day above its 100-day moving average of $0.6907."
The Aussie has consistently traded below $0.6900 since end-July, largely on expectations of further monetary policy easing in the country as domestic data disappoints.
Adding to that grim view, a survey on Wednesday showed Australian consumers had turned gloomier in September worried about their personal finances and the near-term economic outlook.