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AUD, NZD Strongest Since 2018 on Higher Commodity Prices

SYDNEY, Dec 11 (Reuters) - The Australian dollar surged to a 2-1/2 year peak led by soaring prices for iron ore - the country’s top export - while the New Zealand dollar also maintained its climb through levels unseen since 2018 thanks to strong commodity prices.

On track for its sixth straight weekly rise, having jumped 7.8% so far this year, the Australian dollar broke key technical chart resistance of 75 U.S. cents overnight to be last at $0.7562, a level last visited in June 2018.

“Big gains in commodity markets (are) driving the local currency higher,” said Steven Dooley, currency strategist at Western Union Business Solutions.

“Importantly, iron ore prices gained for the twelfth session in a row with Australia’s largest export product up 4.3% (on Thursday) as worries about a cyclone warning in Western Australia sparked supply fears.”

The most traded iron ore contract on China’s Dalian Commodity Exchange, for delivery in May 2021, hit a contract high of 988.50 yuan ($151) a tonne on Thursday.

The Aussie was also buoyant against other major currencies.

It hit a one-and-a-half year high on the yen and a six-month peak of A$1.6083 per euro overnight. It also leapt against the yuan despite worsening trade tensions between China and Australia.

The New Zealand dollar surpassed crucial barrier of 71 U.S. cents overnight and was last at $0.7105.

It is up 0.9% so far this week, on track for its sixth consecutive weekly gain.

The kiwi has risen 5.6% so far this year led by New Zealand’s early success in curbing the coronavirus pandemic and as its central bank all but abandoned plans to take the official cash rate below zero.

New Zealand government bonds rose, sending yields about 1.5 basis points lower at the long-end of the curve.

Australian government bond futures were mostly unchanged.

(Editing by Simon Cameron-Moore)

Source: Reuters

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