By Swati Pandey
SYDNEY, April 27 (Reuters) - The Australian and New Zealand dollars rose on Thursday from multi-month lows in a relief rally after U.S. President Donald Trump pulled back from a threat to kill the North American Free Trade Agreement (NAFTA).
Senior White House officials had said earlier that Trump was considering an executive order to withdraw the United States from the long-standing deal, a move that could unravel one of the world's biggest trading blocs.
Commodity-led currencies, such as the Australian dollar, could be badly hit by any measures in global trade deemed protectionist.
The Australian dollar AUD=D4 rose modestly in Asian hours after the White House said Trump had agreed not to terminate the NAFTA agreement for now. Aussie was last up 0.17 percent at $0.7483, not far from its lowest point in more than three months of $0.7455 on Wednesday.
The New Zealand dollar NZD=D4 rose 0.3 percent to $0.6909, up from a four-month low of $0.6873 on Wednesday.
"In the near term it is a positive, but I think it highlights another failure in terms of fulfilment of pre-election promises by the Trump administration," said Rodrigo Catril, currency strategist at NAB.
"It will be interesting to see how the market takes it in the long-run. It also means that dark clouds hovering over commodity currencies won't go away very quickly."
The market will watch for a speech later in the day by Reserve Bank of Australia (RBA) Governor Philip Lowe for any clues about the monetary policy outlook.
The Aussie took a beating on Wednesday after consumer price data reinforced expectations the RBA will stay its hand on interest rates in the near-term after easing twice last year. The RBA holds its next policy meeting on May 2.
Key measures of core inflation stayed stubbornly short of the RBA's 2-to-3 percent target band last quarter. on New Zealand government bonds 0#NZTSY= fell 2 basis points at the short-end of the curve and about 4 basis points at the long end.
Australian government bond futures climbed, with the three-year bond contract YTTc1 up 2 ticks at 98.140. The 10-year contract YTCc1 added 2.5 ticks to 97.365. (Editing by Neil Fullick)