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AUD, NZD Rally, Risk Sentiment Survives U.S. Inflation Test

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SYDNEY, April 14 Reuters The Australian and New Zealand dollars were pushing higher on Wednesday, as global markets refused to be spooked by a wellflagged jump in U.S. inflation, sending Treasury yields lower and undermining the U.S. dollar.

The Aussie firmed to 0.7657, after rallying from support at 0.7585 overnight. It needs to clear resistance at 0.7677 to end the deadlock seen in the last few weeks.

The kiwi dollar climbed 0.4 to 0.7080, extending a bounce from support around 0.7005 overnight. That took it past stiff chart resistance at 0.7070, a barrier that had held for the past three weeks, and opened the door to 0.714060.

The Reserve Bank of New Zealand RBNZ earlier surprised no one by keeping rates at 0.25 and maintaining its bond buying programme at a policy meeting.

The message was again dovish, with the bank noting the economy had slowed recently and prolonged stimulus would be needed to get employment inflation up to desired levels.

We are more bullish and expect inflation to be above the RBNZs target throughout most of the next two years, said Ben Udy, Australia New Zealand economist at Capital Economics.

We still expect the Bank to raise rates towards the end of next year.

Yields on NZ 10year bonds were off 4 basis points at 1.71, though that largely mirrored a decline in U.S. yields overnight.

Australian 10year bond yields eased 3 basis points to 1.69, aided in part by Tuesdays wellreceived sale of A14 billion 10.70 billion of new 2032…

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