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Australia, NZ dollars ease but set for weekly gains

Published 08/06/2018, 02:49 pm
Updated 08/06/2018, 02:50 pm
Australia, NZ dollars ease but set for weekly gains
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NZD/USD
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By Swati Pandey and Charlotte Greenfield

SYDNEY/WELLINGTON, June 8 (Reuters) - The Australian and New Zealand dollars came off recent highs on Friday as risk trades were hit amid bets Europe's massive bond purchasing was nearing an end and on jitters over souring trade relations ahead of a major meeting of global leaders.

The Australian dollar AUD=D4 was last down 0.2 percent at $0.7608 from a six-week high of $0.7677 touched on Wednesday.

Despite Friday's losses, the Aussie is set to notch up its third straight week of gains.

The New Zealand dollar NZD=D4 held at $0.7022, down from Wednesday's $0.7060 - a level not seen since end-April.

The kiwi is set for a small weekly gain, adding on to a 1 percent rise last week.

"It feels like a risk-off day today as we head toward a fractious G7, the North Korean summit, and a long weekend in most of Australia," said Greg McKenna, chief strategist at AxiTrader.

The so-called Group of Seven summit takes place on Friday and Saturday in Charlevoix, Quebec where trade is going to dominate discussions after U.S. President Donald Trump slapped import tariffs on steel and aluminium imports last week. also looked to a historic U.S.-Korea summit in Singapore on June 12 where the main issue is whether North Korea will abandon its nuclear weapons programme.

Also next week, the European Central Bank will debate whether to end bond purchases later this year, the bank's chief economist said on Wednesday, a hawkish message that sent the euro to a three-week high.

McKenna sees selling pressure for the Aussie around $0.7665/80 where the currency faces critical chart resistance.

Analysts expect the antipodean currencies to tread water this year and edge up only a tiny bit over 12 months, a Reuters poll showed on Thursday. demand for safe haven assets grew, New Zealand government bonds 0#NZTSY= gained, sending yields 2.5 basis points lower towards the long end of the curve.

Australian government bond futures also rose, with the three-year bond contract YTTc1 up 2.5 ticks at 97.760. The 10-year contract YTCc1 gained 3.5 ticks to 97.1950. (Editing by Jacqueline Wong)

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