Australia, NZ dollars ease on well-bid greenback

Australia, NZ dollars ease on well-bid greenback

Australia, NZ dollars ease on well-bid greenbackAustralia, NZ dollars ease on well-bid greenback

By Swati Pandey and Charlotte Greenfield

SYDNEY/WELLINGTON, April 5 (Reuters) – The Australian and New Zealand dollars edged lower on Thursday as the greenback was generally well-bid against most Asian currencies, though an impression of easing trade tensions between the United States and China supported sentiment.

The Australian dollar AUD=D4 dipped 0.3 percent to $0.7692, from a high of $0.7727 touched earlier in the session.

The New Zealand dollar was down 0.2 percent at $0.7291, from a three-week peak of $0.7322 touched earlier in the day.

Both currencies had gained briefly overnight as investors increasingly assumed the trade-war rhetoric between the United States and China was largely posturing. calmed somewhat after U.S. President Donald Trump’s economic adviser Larry Kudlow said the administration was in “negotiation” with China, and not engaged in a trade war. pointed to repeated emphasis by both U.S. and Chinese officials that there is still time for negotiations,” Citi analysts said in a note. “Traders also took note of the positive headlines streaming in on NAFTA.”

Analysts recommended buying the kiwi against the dollar as the best play should trade concerns resurface. The Aussie is already near an eight-month trough on its New Zealand counterpart.

Traders say the downtrend is largely driven by weakness in the price of Australia’s top export – iron ore – while prices of New Zealand’s biggest export earner – milk – has remained more or less stable in the recent weeks.

Iron price futures DCIOcv1 have plunged more than 17 percent so far this year, with the bulk of that in the past couple of weeks.

New Zealand government bonds 0#NZTSY= eased, sending yields 4.5 basis points higher at the long end of the curve.

Australian government bond futures were mixed, with the three-year bond contract YTTc1 flat at 97.820. The 10-year contract YTCc1 slipped 4 ticks to 97.320.

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