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AUD, NZD Extend Gains on Oil Surge, Economic Optimism

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SYDNEY, Feb 16 Reuters The Australian and New Zealand dollars extended their gains against the greenback on Tuesday, as optimism around a global economic recovery and a spike in oil prices underpinned the commodityexposed currencies.

The Aussie bounced 0.29 to 0.7802, the highest in a month. The next chart barrier sits at 0.7820, its January peak.

Across the Tasman, the kiwi dollar advanced 0.46 to 0.7260, and up from Fridays trough of 0.7178. Resistance lies around 0.7280 and the January peak of 0.7314.

The Australian, New Zealand and Canadian dollars all moved in tandem with higher oil prices on Tuesday, as a cold front shut wells and refineries in Texas, the biggest crude producing state in the United States.

The currencies had also benefited from stronger iron ore and copper prices, buoyant expectations for a global recovery and vaccine optimism, traders said.

Thats been the key driver over the last 24 hours, said Steven Dooley, APAC currency strategist at Western Union Business Solutions.

Its also the culmination of a rerating of commodities in general, driving the view that the global recovery and reflation brings the potential for further gains in commodity currencies.

Australian 10year bond yields were pushed wider to 1.33, the widest since March. At 0.12, yields on threeyear paper remained pinned near the Reserve Bank of Australias RBA target of 0.10.

Yields on New Zealands 10year bonds were 6 points higher to 1.46.

Reporting by Paulina Duran in…

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