By Wayne Cole
SYDNEY, Jan 2 (Reuters) - The Australian and New Zealand dollars were aiming to build on recent gains on Thursday as progress in the Sino-U.S. trade war seemed to lessen one major risk to the global economy in the new year.
The Aussie was parked at $0.7018 AUD=D3 , just off a five-month top of $0.7032. The technical outlook was promising after a sustained break of the 200-day moving average, currently at $0.6899, the first since early 2018.
The next major hurdles are a retracement target at $0.7056 and a high from July around $0.7082.
The Aussie ended down 0.6% in 2019.
The kiwi edged up to $0.6736 NZD=D3 and seemed well set for an attack on a series of July peaks around $0.6790.
The White House's trade adviser on Monday said the U.S.-China Phase 1 trade deal would likely be signed in the next week or so. also was supported by Beijing's latest stimulus efforts as China's central bank cut the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan ($114.91 billion) in funds for lending. was also some better news domestically as Australian home prices ended 2019 with the biggest quarterly rise in a decade, a return to boom from bust that promises to support household wealth and, maybe, spending. far, consumers have been reluctant to draw on their new-found riches with retail spending growing at recession-like levels as wages and confidence lag.
The national mood has also been darkened by massive bushfires sweeping the states of Victoria and New South Wales, blanketing Sydney with smoke and squeezing the tourist trade.
Investors have recently pared back the chance of further rate cuts from the Reserve Bank of Australia (RBA) given the lessening risks to global trade.
Futures 0#YIB: are now priced for only one cut in the 0.75% cash rate compared to nearly two just a month ago. A move as early as February is put at a 34% probability, rising to 74% by June.
Investors have all but given up on the prospect of an easing from the Reserve Bank of New Zealand (RBNZ) after a run of upbeat economic data there. RBNZWATCH
A cut in February is seen as a 7% chance and the market implies around 8 basis points of easing risk by August.
Yields on New Zealand 10-year bonds NZ10YT=RR have climbed to their highest since July and at 1.665% are far above the all-time low of 1.005% touched last August.
Australian bonds have likewise come under pressure with 10-year futures YTCc1 down 2.5 ticks on Thursday at 98.5900, near its lowest since July.
The three-year bond contract YTTc1 eased 1.5 ticks to 99.070, having been as high as 99.460 at one stage last year. (Editing by Kim Coghill)