The Australian and New Zealand dollars inched cautiously higher on Friday after Beijing offset a mixed bag of Chinese data by pledging more support for the economy, though risk sentiment remained all-too fragile after a rough week.
The Aussie dollar AUD=D3 firmed 0.1 percent to $0.7107, though that followed repeated failures to crack $0.7150 resistance and left it flat on the week.
The kiwi NZD=D3 put on 0.2 percent to $0.6559 and was 0.8 percent higher on the week so far. It faces chart resistance at $0.6579 and $0.6600.
China's economy grew 6.5 percent in the third quarter, a tick short of forecasts and the slowest pace since the global financial crisis.
Industrial output also disappointed, but retail sales and investment fared better suggesting efforts to support domestic demand were bearing some fruit.
Crucially the Chinese still have an appetite for Australia's major commodity exports. Prices for iron ore, Australia's single biggest earner, hit a seven-month high this week, while coking coal made a 13-month top.
The outlook for liquefied natural gas has also brightened as China cuts back sharply on U.S. shipments, taking supply from other sources including Australia.
"Although supply constraints explain some of the rally in Australia's commodity price basket since July, there is also evidence of improved demand," said Sean Callow, a senior FX strategist at Westpac.
"There remains a fundamental case for an Aussie recovery but it probably needs a further catalyst to break the 50-day moving average at $0.7208."
The Aussie has fared better on the crosses. Concerns over Italy's budget deficit left the euro down 0.6 percent for the week at A$1.6136 EURAUD= , while fresh doubts on Brexit shaved 0.7 percent from the pound to A$1.8340 GBPAUD= .
One looming risk is domestic politics as the Liberal National government faces possible defeat in a by-election over the weekend, which would strip them of a majority in parliament.
The loss of, what has been, a very safe seat could make it harder to pass legislation through the lower house and ultimately threaten the government's grip on power.
Australian government bonds extended their recent bounce as U.S. yields came off a little and Asian share markets struggled to get out of the red.
The 10-year bond contract YTCc1 added 5 ticks to 97.3100, its highest in a couple of weeks, while the three-year bond contract YTTc1 rose 3 ticks to 97.895.
New Zealand government bonds
0#NZTSY= held onto gains with 10-year yields at 2.685 percent from a top of 2.733 per cent on Thursday.
