SYDNEY/WELLINGTON, Aug 26 (Reuters) - The Australian and New Zealand dollars inched higher on Friday, poised to end the week barely changed, as investors awaited Federal Reserve Chair Janet Yellen's speech at a gathering of global central bankers.
The Australian dollar AUD=D4 rose 0.18 percent to $0.7630. It is set to end the week mostly flat, trapped in a tight range of $0.7584 to $0.7655.
The Aussie has added more than 5 percent in the last two months, but has been muted in August largely due to conflicting views on U.S. monetary policy. Investors are now looking to Yellen's speech at Jackson Hole, Wyoming, later in the day for insight on the U.S. monetary policy outlook.
"If the Fed continues to delay rate hikes, a break of April's high of $0.78 and a push up to $0.80 is likely for the Aussie," said Shane Oliver, Chief Economist, AMP Capital.
Oliver, however, expects the Aussie to fall over the long term, citing risks of both another rate cut from the Reserve Bank of Australia (RBA) and a sovereign ratings downgrade.
The Aussie was mostly unchanged on the New Zealand dollar AUDNZD=R at NZ$1.0431, rebounding on Thursday following six straight days of bearish closes. It hit a high of NZ$1.0744 in early August but has since been on a downward spiral.
The antipodean currencies have been resilient in the face of domestic interest rate cuts this year due to carry trades, where investors borrow at low rates in yen, pounds or euros to buy higher-yielding assets such as the Aussie and kiwi.
On Thursday, New Zealand underlined its appeal as the world's highest-yielding top rated sovereign after offshore investors scooped up the majority of a NZ$2 billion sale of 2037 syndicated bonds. investors took 84 percent of the issue, a massive increase from the 37 to 47 percent allocations on the four previous sales.
New Zealand's 10-year bonds pay 2.31 percent NZ10YT=RR , compared to 1.56 percent in the U.S. and 56 basis points in the UK.
The New Zealand dollar NZD=D4 rose 0.15 percent on Friday to $0.7310, leaving it up 0.5 percent on the week so far.
"The fate of the NZD/USD...will likely lie with the USD's response to Yellen's comments in the early hours of tomorrow morning," said BNZ currency strategist Kim Martin.
New Zealand government bonds 0#NZTSY= eased, sending yields 1 basis points higher at the long end of the curve and 2 basis points at the short of the curve.
In contrast, Australian government bond futures fell, with the three-year bond contract YTTc1 down 2 ticks at 98.61. The 10-year contract YTCc1 dipped 1 tick to 98.125.