Australia, NZ Dollars Pumped Up by U.S. Stimulus Splurge


SYDNEY, Jan 15 Reuters The Australian and New Zealand dollars stood firm on Friday as the promise of massive U.S. fiscal stimulus brightened the outlook for global growth and resource prices.

Presidentelect Joe Biden on Thursday unveiled a 1.9 trillion package to jumpstart the economy.

That was a boon to growthsensitive currencies such as the Aussie, which held at 0.7774, having stretched as far as 0.7805 overnight. It was up from a 0.7666 low early in the week, and not far from the recent high at 0.7819.

It also reached some notable milestones on the cross rates, hitting its highest since late 2018 against both the euro and the yen while breaking major chart barriers.

The kiwi dollar firmed to 0.7218, but struggled to clear resistance at 0.7240. Support comes in at the week low of 0.7148, while the recent peak at 0.7314 stands as a major chart barrier.

The U.S. currency was also undermined by a dovish outlook from Federal Reserve Chair Jerome Powell, who showed no inclination to taper asset purchases anytime soon.

The prospect of more U.S. borrowing dented Treasuries and saw local bonds outperform.

Australian 10year yields edged up to 1.09 but U.S. yields rose even more so the spread between the two moved to 3 basis points. It had been as wide as 11 basis points in December.

A surprisingly brisk recovery in the domestic economy means the Australian government needs to borrow a lot less than first projected.

Data out Friday showed home loan commitments surged…

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