The Australian and New Zealand dollars were grinding higher on Wednesday as hints of progress in Sino-U.S. trade talks lifted the yuan, while dovish signals from a range of central banks supported commodity prices.
The Aussie dollar AUD=D3 edged up to a two-week high at $0.7176 and away from its recent low of $0.7054. It now faces resistance just above $0.7200, while support lies around $0.7105 and $0.7080.
The kiwi currency NZD=D3 was firm at $0.6875, having bounced 0.5 percent overnight. It got as far as $0.6887 at one point but shied away from resistance at $0.6893.
Australian data were mixed, with wages missing forecasts in the December quarter but annual growth in the private sector running at the fastest pace in five years.
More telling were comments from U.S. President Donald Trump overnight that trade talks with China were going well and he might be open to pushing off the tariff deadline, saying March 1 was not a "magical" date.
Bloomberg reported the White House was seeking a pledge from China that it would not devalue the yuan, sending the currency higher.
This was a positive for the Aussie as investors tend to use it as a liquid proxy for the Chinese currency, shorting it when there are fears the yuan could fall.
"News that U.S. trade negotiators have asked for a stable yuan policy as part and of a tentative agreement by China has triggered a broad U.S. dollar sell off with AUD and NZD benefiting," said Rodrigo Catril, senior FX strategist at National Australia Bank.
Efforts by Beijing to stimulate its economy have also combined with dovish turns from a who's who of central banks to help underpin prices for Australian resource exports.
Just Tuesday, the head of the Bank of Japan floated the idea of further stimulus if sharp gains in the yen hurt the economy.
New York Fed President John Williams said he saw no need to hike U.S. interest rates again unless economic growth or inflation shifted unexpectedly higher.
Anticipating economic largesse from policy makers, investors have piled into emerging markets and a range of commodities from copper to precious metals.
Gold on Wednesday climbed to a record peak in Aussie dollar terms at A$1,874 an ounce and is up 13 percent since early December in a windfall for Australian mining profits.
The kiwi got its own lift as a global auction for dairy, New Zealand's biggest goods export, saw prices rise for the sixth sale in a row.
The dovish chatter from central banks gave Australian bond futures a boost, with the three-year bond contract YTTc1 up 3.5 ticks at 98.355. The 10-year contract YTCc1 rose 3 ticks to 97.8950.
New Zealand government bonds
0#NZTSY= firmed, sending yields 1 to 2 basis points lower.
