Australia, NZ dlrs bounce off lows as traders cling to positive trade news

Australia, NZ dlrs bounce off lows as traders cling to positive trade news

© Reuters.  Australia, NZ dlrs bounce off lows as traders cling to positive trade news© Reuters. Australia, NZ dlrs bounce off lows as traders cling to positive trade news

By Swati Pandey

SYDNEY, March 26 (Reuters) – The Australian and New Zealand dollars bounced on Monday as investors saw some light at the end of the tunnel after South Korea won a reprieve from U.S. steel tariffs, rekindling hopes a full-blown global trade war might not materialise.

The antipodeans bounced from near 16-month lows against the Japanese yen and were well bid on the U.S. dollar as well.

The Australian dollar AUDJPY= rose 0.6 percent to 81.07 yen after going as deep as 80.51 on Friday, the lowest since November 2016. In the two weeks ended Friday, the lost about 4 percent against the Japanese currency.

The New Zealand dollar NZDJPY= also nudged higher to 76.28 yen from a recent trough of 75.54. The cross fell about 1 percent last week.

Global markets were shaken after U.S. President Donald Trump moved to impose tariffs on Chinese goods, edging the world’s two largest economies closer to a trade war. The tariffs were on top of import duties on steel and aluminium levied on a number of countries, including China.

The Asian giant has promised, in no ambiguous terms, that it would retaliate.

“Traders are continuing to look to safe haven products with the Japanese yen, in particular, having a very strong finish to the week both against the dollar and on the crosses,” said Nick Twidale, chief operating officer at Rakuten Securities Australia.

Twidale noted positive headlines over the weekend toward resolving the trade spat, with China and the United States holding dialogues to reach an agreement. United States also agreed to exempt South Korea from steel tariffs, instead imposing a quota on steel imports as the two countries renegotiate a trade deal. we do start to hear more favourable news from the U.S. administration and indeed from the Chinese side over the next few trading sessions, then we may see a sharp reversal of the recent moves in the market,” Twidale added.

Against the greenback, the Aussie was up 0.4 percent at $0.7727 from last week’s trough of $0.76720. The kiwi bounced 0.6 percent to $0.7270, the highest since March 16.

New Zealand government bonds 0#NZTSY= rose, sending yields about 3.5 basis points lower at the long end of the curve.

Australian government bond futures were mixed, with the three-year bond contract YTTc1 up half a tick at 97.845. The 10-year contract YTCc1 eased half a tick to 97.3350. (Editing by Richard Borsuk)

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