News: Australia, NZ dollars gain on yen as trade sentiment improves

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    The Australian and New Zealand dollars jumped against the safe haven Japanese yen on Tuesday, as risk appetite was whetted by yet another sign of rapprochement between the United States and China.

    The U.S. Treasury Department on Monday dropped its designation of China as a currency manipulator days before top officials of the world's two largest economies were due to sign a preliminary trade agreement to ease an 18-month-old tariff war.

    The widely expected decision sent equities soaring while safe harbour assets slipped.

    Against the Japanese yen, the risk sensitive Australian dollar AUDJPY=R rose for a fourth straight session to a near two-week high.

    The New Zealand dollar NZDJPY= was up for a third straight session to the highest since Jan. 2.

    Moves against the greenback were muted. The Aussie AUD=D3 was down 0.1% at $0.6894 after a dull session on Monday. Its kiwi cousin NZD=D3 was flat at $0.6628.

    "Risk appetite was broadly supportive overnight with the AUD/JPY seeing sustained strength," ANZ economists wrote in a note.

    "Outlook for the AUD is balanced today with USD factor to be key."

    The dollar hit an eight-month high of 109.95 yen JPY= in U.S. trade on Monday and last stood at 109.93. The Japanese currency has weakened about 1.3% so far this year.

    As safe havens fell out of favour, investors dumped bonds. New Zealand government bonds 0#NZTSY= eased, sending yields about 5 basis points higher at the long end of the curve.

    Australian government bond futures slipped, with the three-year bond contract YTTc1 off 1.5 ticks at 99.195. The 10-year contract YTCc1 fell 4.5 ticks to 98.73.

 
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