The Australian and New Zealand dollars inched ahead on Monday as investors found cheer in slowing death rates in some of the countries worst hit by the coronavirus, lifting share markets across Asia.
The Aussie nudged up 0.4% to $0.6020 AUD=D3 having been as low as $0.5980 on Friday, which now acts as support. Resistance stands at $0.6075 and the recent top of $0.6215.
The kiwi dollar held at $0.5876 NZD=D3 and off a low of $0.5844, with resistance lined up at $0.5925 and $0.6067.
Dealers cited reports of a slowdown in the number of new deaths in France, Spain and Italy, for the better mood.
Yet officials in the United States warned of more deaths ahead, while British Prime Minister Boris Johnson was admitted to hospital with the disease and media reported Japanese Prime Minister Shinzo Abe would soon declare a state of emergency.
In Australia, the government sounded hopeful the outbreak was coming under control, though analysts warn it will still cause a sharp contraction in economic activity this quarter.
The Reserve Bank of Australia (RBA) has already cut rates to 0.25% and launched a campaign of bond buying aimed at keeping three-year yields AU3YT=RR around the cash rate.
The bank holds its monthly policy meeting on Tuesday and is expected to stand pat for now as it assesses the impact of its measures and of the government's massive spending plans.
The government intends to sell around A$5 billion of new bonds every week in a huge ramp up of borrowing.
Early signs are demand is strong with a A$2 billion tender on Monday drawing bids worth 4.7 times more than the amount on offer. While there were 68 bids only two were successful, suggesting the buyers paid top dollar for the short-term paper.
"The front end remains anchored and will do so with the target rate of the 3-year at around 0.25% proving very effective," said Martin Whetton, head of bond strategy at CBA.
"We expect the 3-year to hold around 0.25% over the year, with a risk of a drift lower towards 0.1%," he added. "Our existing forecast of the ACGB 10Y at around 0.5% remains current, but we note the long end volatility will see the market shift around."
Yields on three-year paper stood at 0.26% on Monday, while 10-year yields held at 0.77% having briefly spiked as high as 1.54% during the global market turmoil of mid-March.
The 10-year futures contract YTCc1 was steady at 99.2550.
