Australia, NZ dollars near 1-month peak as Trump stays mum on fiscal plans

[SYDNEY] The Australian and New Zealand dollars stood near one-month highs on Thursday as the greenback skidded after President-elect Donald Trump failed to elaborate on his economic policy agenda at a much awaited news conference.

The Australian dollar was at US$0.7445, having rallied almost one per cent overnight to as far as US$0.7471.

That was the largest single day rise since Sept 6 and its highest reading since Dec 14.

“The AUD continues to be the best G10 performer year-to-date, benefiting from USD weakness,” said Rodrigo Catril, currency strategist at National Australia Bank, referring to a group of ten developed countries.

“For markets, the lack of detail on Trump’s stimulus plan along with… reaffirmation of his intention to build a wall along the Mexican border triggered some volatile moves across asset classes.”

Mr Trump’s first news conference since the Nov 8 election contained no details on tax cuts and infrastructure spending, two factors that had fuelled the five-week rally in stocks and a selloff in global bond markets.

He instead took aim at targets that included pharmaceutical companies and US intelligence agencies. Mr Trump accused the intelligence agencies of practices reminiscent of Nazi Germany after leaks led to some US media outlets to report unsubstantiated claims that Russia possessed compromising information about him.

Elsewhere, the Aussie held at a two-month peak against the pound, while the euro languished near a one-month trough after losing 0.7 per cent overnight.

The Aussie was also at a more than six-week high against its New Zealand counterpart.

The New Zealand dollar stood at US$0.7054, after hitting the highest since Dec 15 at US$0.7088.

While offshore events dominated moves in the Kiwi, traders will watch out for New Zealand’s electronic retail card spending data due Friday to confirm the recent trend of strong domestic demand and household consumption.

New Zealand government bonds gained, sending yields one basis point lower along most of the curve.

Australian government bond futures rose, with the three-year bond contract up two ticks at 98.02. The 10-year contract rose 4.5 ticks to 97.28.