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Australia, NZ dlrs seen with largest weekly gains since June

Published 13/01/2017, 12:38 pm
Updated 13/01/2017, 12:40 pm
© Reuters.  Australia, NZ dlrs seen with largest weekly gains since June

By Cecile Lefort and Charlotte Greenfield

SYDNEY/WELLINGTON, Jan 13 (Reuters) - The Australian and New Zealand dollars were biding time just under one-month highs on Friday and were on track with hefty weekly gains versus their U.S. counterpart and the pound.

The Australian dollar AUD=D4 edged down to $0.7480, having popped as far as $0.7519 on Thursday, a level not seen since mid-December.

The Aussie has jumped 2.4 percent this week and if sustained, it would be the largest such rise since June last year.

Much of the gains are due to a brutal shakeout in U.S. dollar bullish positions which were built up after the November election of Donald Trump as the next U.S. president.

Traders said the rally in the Aussie dollar has plenty of scope with $0.7571 as the next target. The Aussie dollar had topped $0.7780 just before the U.S. elections on Nov. 8.

The Antipodean currencies also stood tall against Sterling which skidded to a two-month trough of A$1.6188 GBPAUD=R and NZ$1.7037 GBPNZD=R .

The pound has plunged more than 3 percent so far this week against both Aussie and Kiwi dollars, the largest falls since mid-last year. Much of the drop is due to fears of a "hard Brexit." were awaiting trade data out of China, Australia and New Zealand's top export partner. ECONCN

The New Zealand dollar NZD=D4 rose for the third day in a row as traders unwound their previous appetite for the U.S. dollar in the absence of information on fiscal stimulus from American President-elect Donald Trump.

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The Kiwi rose from $0.7140 to $0.7107, though it could not hold its one-month high of $0.7144 hit in the early hours of the morning.

Still, the Kiwi was on track for a gain of 2.2 percent this week.

At home, electronic card sales data showed spending fell slightly in December on a seasonally adjusted basis.

A cooling housing market and higher bank interest rates were likely underpinning the fall, though analysts said this was very unlikely to affect the Reserve Bank of New Zealand's rates decision in February.

"Putting all this together, while we don't expect to see spending collapse over the coming year, we may see a more gradual pace of growth over 2017," said Satish Ranchhod, senior economist at Westpac Bank.

New Zealand government bonds 0#NZTSY= gained, sending yields 1 basis points lower at the long end of the curve.

Australian government bond futures nudged down, but remained near multi-week highs, with the three-year bond contract YTTc1 off 2 ticks at 98.020. The 10-year contract YTCc1 shed 1 tick to 97.2900, while the 20-year contract YXXc1 was steady at 96.6650. (Editing by Kim Coghill)

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